Partnership Structure Advice - 3 Members

[Account Closed]

Hi everyone - had a quick question regarding partnership structuring.

Including myself, I have 3 partners and we are looking to invest ~$100K.  Finally taking the leap!

If we are equally contributing capital, is their a partnership structure that would make sense for asset protection and tax purposes?  This would be our first purchase but perhaps down the line we would accumulate 2, 3, 4 properties (so maybe answer depends on time frame)

Also, if one of the members if THE key operator, is their a way to get the economics to work, or would you expect equal sharing of profits (i.e., 33.3% each)?  Curious about any precedents and what people have seen / are doing.

Thanks!

[Derek Diamond]

@Account Closed

Welcome to the community! And congratulations on the huge first steps. I am not a lawyer and this is not legal advice.

I personally like LLC's. You should be able to divide up shares to give the "key operator" more if that is what you are saying you want to do. It can give some form of legal protection. If a member dies or wants out you can add what you want to do to the LLC articles before it happens. In the articles you can state how long the investment will be for and other details. On the down side your rate will probably be higher as a company than a personal buyer. So there are always pros and cons to any structure.

If this one is successful then you are set up to keep going and if not it is not too expensive to set up a LLC that you won't use for the next property.