Rental Property Business Structure

[Marcus Kuhnert]

Hello All - new user, first post so please bear with me.

Two friends and myself are looking to purchase a rental property together. We will be contributing equal amounts into the down payment, duties, etc. What is the best business structure to create for the property? I assume LLC but since we will have three 'members', I wanted to ask this community. We are in Wisconsin if that matters. I know, "talk to a real estate attorney" is the boiler plate response, but let me know what you think! Thanks all, looking forward our interactions.

[David Miller]

Business entity - probably LLC - with a well written operating agreement that governs each parties' rights and obligations, management authority, spells out how money is spent and distributed, dictates how decisions are made and what type of consent is necessary for different types of decisions, includes buy-sell provisions in the event of a dispute, death, divorce or disability, etc. etc. etc. if you decide to own it individually as tenants in common, you need a property management and ownership agreement that addresses similar issues outlined above.

Understand the impact that different ownership types will have on procuring financing.

Now I will say it: go talk to a good attorney who can draft documents based on your and your partners' goals and circumstances.