So if we underperform the pro forma and we end up losing up to $100k on the deal, he would share in that $50k loss and I would eat $50k of the loss.Is that what you mean?

Should we then form a partnerhsip LLC? 

Any members who want to invest can do so (minimum $5K), and we form a joint venture LLC as the singular investor (the limited partner) in that syndication deal.

Aking Price : $2.3 millionProperty TypeMultifamilySubtypeApartment BuildingNet Rentable (sq ft)13,400Cap Rate6.11%Pro-Forma Cap Rate 6.70%NOI $140,615Units17Year Built192813 1Bed/1Bath And 4 2Bed/1Bath Unitsin New Jerseyappreciate you thoughtsthanks 

I'd say - don't just take their pro forma at face value, make sure you run your own numbers!

Often times, Sellers used what called "Pro Forma" numbers. 

Cap ex is not easy to absorb and the "excel pro-forma"  rarely materializes as reality. 

Would the best practice be to form a new LLC where all four of us are managing members?

Develop the current P&L and then conduct the pro forma estimates in order to truly analyze the property!

@Douglas Gratz  1)  if  project is costing 1.5 mill to build and you will have   690K form a  refinance - is the  balance  coming from the hard money source ?