Could anyone make a suggestion on this deal structure?
1 complex owned by two partners-
1 owner contributing 20% of the down payment, and the other one contributing 80%
The owner who contributes 20% can’t be called to the table for more money if the complex needs it. The other partner has to come up with the money.
When it comes time to sell the complex, obvoiusly the partner who only put up 20% with no additional risk, really shouldn’t get 20% of the profit. But what would be a fair amount of the profit? How could it be structured?
form up an LLC
one member puts up $80, the other $20. equity splits are now set at 80/20.
the balance of the funds are loans to the LLC. this has no effect on equity.
in the operating agreement, you can specify who will contribute what for repairs, etc., if necessary. ideally these funds will be loaned to the LLC.
when sold, repay the loans first, with interest. each partner is rewarded proportionally by earning interest on the amounts at risk.
after loans are satisfied, you can decide how to split the remaining income, and specify it in the operating agreement as well.
reduce EVERYTHING to writing.