Do we need an LLC for our partnership?

[Mary Ciccarelli]

My boyfriend and I are looking to buy our first house and house hack either a duplex or triplex. Since this is not just a residence but a business we think it’s smart to have a legally binding document that describes our agreed-upon partnership.

What is the best way to go about this? Create an operating agreement through an LLC? Or is there a way to form a contract without having to create an LLC?

Open to any other advice for this type of situation!

Thanks!

[Caroline Gerardo]

LLC costs money: attorney fees, annual state filing fees, and extra CPA fees to file separate income taxes. Itemize who brings the money, who has income, who has perfect credit... who does the repairs. What happens when you break up? What is the time frame to sell? Who arbitrates decisions? All the nitty gritty things that can go wrong: what will you do when tenants don't pay, when there is damage, how much reserve money do you have, who writes the checks? Before you set up an LLC you can get a yellow pad out and make note of all the possible wrong things that can happen and how you will deal with fixing the outcome. Then write an agreement, get two witnesses. Without actually owning anything I would not advise spending thousands of dollars to set up a LLC.