Paid in equity sitting in a property does not generate a return.

But when it comes down to it, there would need to be a proper system set up to ensure that both parties are putting in equal amount of work and are both motivated to do more than agreed upon. 

If you take that gain in equity into your financial analysis then you will probably see that the property will have a 10-20% return (depending on where you are at in the life of the loan).

I would rather not secure it with properties, but I have $250k equity in my primary house, and another 500-600k in equity in other rental properties - if helpful.

I believe you are only allowed to keep $30k in equity in your residency only.

In return, he is expecting a split in equity.

I currently own 2 properties in AZ free and clear.  I want to use the 250k in value to purchase a multi unit rental in Chicago, while keeping and renting my AZ properties.  My income docs aren't there, is there a priv...

If you can find deals at 70%-80% FMV or ARV, you can make a case with your partner for 50/50 split as your contribution is the built-in equity.

Property will have appreciated to $268,624.28 and with a payoff of $138,840 that leaves $129,784.28 in equity.

I am thinking about selling one to make money to pay off debt which is currently the house I live in. it should bring me I hope 120000 in equity and this would help me bring down the last of my depth again.