Using my LLC for a flip but bringing on a partner for one project

[Fred Canzano]

I am opening up an LLC for my wife and I to use in real estate investing. I want to do a flip under my LLC but bring on a partner for the project. What are my options for bringing him on board? Its a 50/50 split on the profit end. I want to make sure everything is done correctly, especially the tax end of it. Want to be sure we are both protected all around

[Jeremy S.]

No need to add him on the LLC.

Having just done this myself I would suggest opening a NEW checking account that is dedicated to this project in both your names. Deposit your cash each and Get debit cards for each of you and use it for all expenses. Sell house, deposit check, take out initial deposits, split balance 50/50, close account and move on to the next one.

I would also suggest if you are both physically working on the property that you agree on an hourly rate and pay it if one person works more hours than the other. My partner had unforeseen health issues during the project and I had vacations and softball. He ended up with 10 more hours and got $250 more than I did. The biggest benefit of this arrangement was actually keeping track of the hours. I can almost guarantee that each person will believe they have considerably more hours put in than the other partner if it is not tracked.