Partnership structure for new home build in California

[Jon Anderson]

Hello!

I’m looking for advice regarding how to structure a partnership. I have done two other deals with this individual without incident. However, this is a bigger project. We are looking to purchase land and build a new single-family home here in Southern California.

This will be a 50-50 partnership. He will serve as the “boots on the ground“ and handle all the day today issues withThe process of buying land, getting all permits, plan designs, he will serve as a general contractor role.

I will be providing the necessary capital to get the project off the ground until we can obtain a construction loan. I will be purchasing the property out right. Once we have a firm figure on the cost of the project as far as construction, I’ll be in charge of obtaining a construction loan and providing any Gap funds.

Our previous projects were simply me loaning him money at a fixed return. Those projects were rehab flips.

I'm guessing we need to set up a separate LLC for this particular project. I will be much more involved with the decision making with regard to this project and I was with the other projects. Do people set up a separate bank accounts under this new LLC to deal with all the transactions related to the project?

I'm just trying to get an idea of the best way to handle the logistics regarding funding. Do people set up a separate account? Are they set up in both of our names and under the LLC?Is setting it up simply under the LLC adequate if the LLC describes our partnership in detail?

I guess I wanna know what it is I’m not thinking of that I should be. Any help/criticism/whatever is appreciated.

Thank you!