partnership with existing hostel?

Hi everyone!

Just wondering if anyone had any thought/ideas about structuring a partnership agreement between a hostel which I am opening, and an existing hostel located 2 blocks away.

I first approached the other owner to simply inform them I was opening a hostel in the same neighborhood. Since then, I have brought that owner to the house I am buying and they have expressed interest in becoming a partner. They will contribute about 1/7th of the price of the house ($50,000), and offer their expertise, contacts, and overflow of guests (he said their max overflow of guests was 22 in a night.)

Anyone have creative ideas on how to structure this partnership agreement? I can only think of giving him a % of total profits.

Thanks and I look forward to the responses

-Justin