A freind and i plan to partner up and become RE investors. Should wecstartvan LLC? An LLC for each of us? We dont have an accountant or tax advisor yet...and am wondering what would be the best method to form this partnership. We are in Illinois. Thanks so much...

Steve thanks for the suggestions. I have a few referrals already for an attorney but I'll certainly take another one if you don't mind. I'll be in touch when the time is right...thanks again.

Paul Nelis, I'd recommend a good real estate attorney. I have a reference for a great one if you would like. You will want exit strategy listed in case one of you passes way. Also you will want to list how the value will be calculated in the situation of one buying the other out. You will also want to get an accountant involved in the conversation as well. I recommend you and your potential partner, an attorney and an accountant sit down and figure out what the best situation for you is. -Steven the Tax Guy

Besides an operating agreement and insurance for each of us (in case one gets hit by a truck his wife will get control, etc.), what else should I think about? Also, what does "charging order protection" mean?

I'm not an attorney, but if you and your partner are interested in holding rental property, an LLC is probably the best way to go. Don't form your own individual LLC's (more work than necessary). Simply form one LLC that will purchase the property(ies) and figure out how many units (shares) each of you will own, 50/50, 60/40, etc. You might even enjoy some good charging order protection from Illinois state, but I'm not sure. You'll also need a good operating agreement that will spell out each member's right and responsibilities. This is probably a job for a real attorney and not one of those online LCC mills. Good luck.

We work together and we are both hard workers. We've been working together for 15yrs. We both make very well at work and saved up a nice amount to invest. We both travel (not together though) and since we plan to do a LTBH strategy of rental properties to build wealth for our newborns (we both had kids recently), if something happens, usually one of us is around in town. We both also know a lot of contractors/handymen and we both can get our hands dirty. Personally I built homes, and rehabbed every house I ever lived in. I can do electrical, plumbing, etc. So we think it makes sense to partner up. Also, i feel this market presents some opportunity that may not be around in a few more years. We'd like to take advantage of that if we can.

Paul Nelis, I see you're in Schaumburg. Not too far from me. I'm located near Gurnee. Don't hesitate to ask here if you have any questions. You need to figure out how and what you want to invest in. Figure out a strategy work out a plan of attack. What is your required margin in the activity you pick. Also your personal tax situations will also be dependent upon what entity makes the most sense. -Steven the Tax Guy Your guide to IRS laws, rules and regulations.

Becoming RE investors means several things nowadays: Landlording, flipping, wholesaling, etc. First off, what exactly do you want to do? Why are you partnering up? Are you going to be 50/50? Is one bringing the money and the other the know-how? Iron out your business plan first and then it will be easier to decide what type of entity to form.

LLC or something else?LLC or something else?

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