Using an LLC in a partnership

[Trace Garretson]

Hello everybody, and thanks for giving me a moment of your time. I have finally saved enough to begin investing, but before I do I have a couple of questions regarding my strategy and how to start off on the right foot.

I have formed a partnership (by verbal agreement so far) amongst myself, and two other people close to me. We are prequalified, and between us have enough cash and experience to manage all of the operations. Two of us live in Colorado, while the 3rd partner lives out of state (which is where we will be investing). 

We are curious as to if we should put this property in our names, or under an LLC, and what the pros and cons of either would be. In general I believe an LLC might cost us more but provides a layer of protection for a worst case scenario where one of us cannot hold up our end of things later down the road. What are your thoughts?

Also I want to mention that that it is highly possible we will be intending to purchase multiple properties together down the line. HOWEVER, I am also interested in purchasing a solo investment myself in an unrelated market, and am looking for advice or understanding on how this will play out as far as an LLC or multiple LLCs are concerned.