Equity Partner Wants Share of LLC, Not Individual Deal?

[Aaron Mikottis]

Hi BP. I've got a potential equity partner who is interested in buying a stake in my LLC instead of buying into individual deals. It would be something like a $20,000 starter investment and then an additional $20k contributed each year. I can use these funds to pay for property acquisition, marketing, rehabs, or anything else needed to keep the company growing.

Is this a dream come true or an accounting nightmare? Has anyone structured something similar? Any pitfalls to watch out for?

[Jay Hinrichs]

the worse decisions I ever made was allowing minor partners into my LLC's many times this leads to bruised feelings and or litigation to unwind.

now this is not a lot of dough.. so it depends on how much interest would 20k buy IE 1% of the LLC or 50%.

Also if you are planning on any debt in the company any member with 20% or more ownership is usually required to be on the loans and PG said loans.  so a few other thoughts there.