Structuring partnership deals

[Christian Becker]

I have a couple money partners and I have set up the following structure. Hoping for some feedback and suggestions on improving this or what other people have done for structuring the deals.

(1) Set up a parent LLC which is owned 50-50 with my money partner.

(2) set up a subsidiary LLC for each property purchased, which is 100% owned by the parent LLC.

(3) purchase properties personally with myself and money partner on title and note.

(4) quitclaim deed the property to the subsidiary LLC

This structure was recommended by an attorney to isolate each property for liability reasons and to keep books, etc separate. If a property needs to be sold, also easy. Anyone using something different? Are there problems I’m not anticipating?

An alternate would be to set up one parent LLC that acquires all properties.

My business plan is to buy and hold rental properties long term and to keep my partner in the deals long term 10-15 years until properties are paid off. Maybe even longer.

[Christian Becker]

@Brandon Sturgill

Looking to buy a few dozen in the near term. Ultimate goal owning several hundred doors.

Alternative would be to maybe set up one LLC that owns all properties. Or set up an LLC for something like every 5 properties. Doesn't isolate them as well obviously. But less hassle.

I'm also intrigued by the serial LLC. Will explore that concept. Seems like and answer to the problem in a simplified way that will provides protection.