Looking for Lawyer in Dallas TX to start LLC

[Calvin Brown]

Hi Everyone,

I am new to the market, I have spent the past year soaking in everything I can. 

I have found a partner that has access to a large amount of capital. We are looking to create a lawyer and get an official business started with a 50/50 split. Does anyone have any advice on the most efficient way to go about this? Also recommend a lawyer in the Dallas area?

[Joseph B. Davisson]

WIll the investor money be borrowed, or is the investor taking a membership interest in the entity owning the property, or a fee simple interest in the property?  Furthermore, will the profits from the operations be rolled into future transactions or will they be disbursed?  You will need to discuss your plan with your CPA and discuss the anticipated tax consequences of the structure of your venture in light of the types of transactions you anticipate.  

If this venture is for investment purposes, and you are not living off the profits, then consider a structure that will allow you to defer the capital gains through a 1031 exchange. Ask you CPA about the consequences of forming an entity wherein you are each own an equity interest, and the ability of the entity to defer capital gains, and prohibitions on exchanging your interest in the entity for real property and expecting a capital gains deferral. You and the investor may consider holding you interests as tenants in common (TIC) if you plan to disburse or take your capital gains upon the sale and each do with your portion as you please (whether that be a 1031 or not). Some form of management agreement stating the terms of how the property is managed, should accompany the TIC agreement if you go this direction.

Keep it simple to start and get a deal or two under your belt with your investor before you "get married" with a grand plan.  Regardless, have an exit if the relationship does not work out.  A push/pull buy sell agreement is a good idea of these types of business arrangements.

Also, keep in mind that you and your investor should not be represented by the same attorney.  You each have competing interests.  50/50 sounds good in theory, but are you equally splitting profits or control?  Furthermore, how is liability split?  

Do some deals and then learn what works your you and the investor. Learn from these deals and work this experience  into an ongoing agreement. Consider borrowing money from the investor and having the loan (on which interest accrues) secured by a deed of trust and then having a separate percentage of profits agreement in which you both share in the profits. This way, owner of the property maintains control, lender is secured, and if there are profits, owner pays the interest and owner and lender split the profits.