I agree you should seek legal advice, particularly since LLCs are created by state laws, so the laws about investments may vary from state to state.
If the investor is going to buy the property, you will be the general contractor doing the work (or arranging for others to do the work), and then you split the profits when the home is sold, you are going to have to have some important discussions about how to split those profits to take into account your labor on the one hand and their investment risk on the other hand.
In general, I can think of four ways this might happen. These are only for illustration and suggestion purposes, you need to discuss your options with an accountant and/or attorney. There may be other options I have not thought of.
1. Mr. X loans money to the business. The business pays an agreed-upon interest rate regardless of the success or failure of the flip. Mr. X is not an owner, co-owner, shareholder or anything else of the business or the property.
2. Mr. X becomes a participating partner in the business. You would change from a single member LLC to a multi-member LLC (or add him as a member if you are already a multi-member LLC). You will want some written agreement that specifies the level of each partner's participation, the duties and obligations of each partner and how they are rewarded (how the profits are divided).
3. You change the business to an S-corporation and Mr. X. becomes a shareholder, and everyone who co-owns the business also owns some number of the shares. People who actively work in the business take a fair salary for their work. Investors who don't actively participate don't take a salary. All shareholders get a share of the profits (if any) based on how many shares they have.
4. Mr. X buys the home as the sole owner, and hires your LLC to flip it. You are the general contractor, do some work, and hire subcontractors as needed. You get paid for your work based on some agreed-upon schedule. At the end, Mr. X sells the house and keeps any profit.
In #1, Mr. X gets paid an amount agreed in advance, regardless of the success or failure of the flip. In #4, you get paid an amount agreed in advance, regardless if the flip makes more or less money. In #2 and #3, you more evenly share the participation and risks.
