Advice on structuring partnership / LLC

[Darian Gore]

Hello! 

I'm currently entering a partnership between myself and 2 other individuals. I'm trying to decide how to structure either an LLC or partnership.

Essentially it breaks down as 3 partners, one provides sweat equity through property acquisition to placing property management, one does financial modeling and analysis, and the third provides capital. What is the best way to structure this so everyone is covered but also able to operate and close deals quickly?

[AJ Exner]

Quote from @Darian Gore:

Hello! 

I'm currently entering a partnership between myself and 2 other individuals. I'm trying to decide how to structure either an LLC or partnership.

Essentially it breaks down as 3 partners, one provides sweat equity through property acquisition to placing property management, one does financial modeling and analysis, and the third provides capital. What is the best way to structure this so everyone is covered but also able to operate and close deals quickly?

Darian, 

A lot of different ways of doing this so I don’t think you could go “wrong”. I would just discuss with the partners how they would like to break up the venture.

My advice, assuming speed and efficiency is the goal, is to make the second person the "majority" owner/member of the LLC. As the ‘majority' they will be the one signing off on things, which if they are the ‘financial modeling' then they would be the primary guarantor and could sign off on stuff. Of course, if the capital provider wanted to do that, they could do that too.

My first thought was a 50-30-20 split of the ownership percentages. The primary guarantor would be the one doing most of the ‘signing off’ and would be primary point of contact with lenders. Of course, you could always do 34-33-33 as well, so its just about what everyone is comfortable with, but in the end the concept is the same.

Good luck!