Partnership with per unit investors

[Mike Curley]

Hi BP,

My partner and I are working through what structure we should set up and I'd be very grateful for suggestions and advice from anyone who has set up a similar plan. We will be buying, rehabbing and holding 2-4 unit houses and eventually plan to add small multi-family to the portfolio.

We have multiple family and friends who are interested in investing. We are consulting with an experienced RE attorney and CPA, but would love feedback from those who have done it in the arena, so to speak.

We are planning to set up an LLC as the "mothership" and then have per unit LLC's with separate bank accounts set up for each property. We would then sell shares to investors per property. This is the part I am not totally clear on and would love suggestions or resources to learn more on this type of structure, or advice on a better way to structure this type of business plan.

Thanks!

- Mike

[Amy Wan]

@Alina Trigub is correct--you need to talk to a securities attorney. On the transactional cost front, I would add that when I have folks wanting to syndicate residential or small multi-family, I usually advise them to do a blind pool and put all the properties into one offering so as the spread the legal and other transactional costs around all the properties. It's not worth it to syndicate raises that are too small. Happy to chat if you need.