Partnering on a flip - setup LLC? Help eval my deal please

[Steven Tankersley]

Hi all,

I am a realtor and licensed contractor, and I need some advice moving forward on a flip in California. 

Background:

I found the property and contacted the owner. I reviewed the property developed a renovation estimate, ran the comps, and wrote the offer to the owner. The property is in partial probate (two owners, one is in probate), but the attorney has authority to sell (no court approval needed). ARV = $600,000 renovations =$78,000 purchase price =$350,000. With all costs considered, I estimate $130,000 profit.

 I wrote the offer with the buyer listed as my name "or assigned". I brought another realtor in on the deal who has $100,000 to invest of his own, and who was able to line up a private money investor who provided bank statements for proof of funds for the offer. I have approximately $20,000 of my own cash to invest on this deal, so obviously my partner has a larger stake in this financially. The original plan was to have myself complete the renovations, however it would require me to quit my full time job which I don't want to do at this time.

My questions are:

1) Should we set up an LLC for this flip?

2) Do you set up a separate LLC for each flip?

3) What is an equitable profit split on this deal? I found the deal and negotiated it, but my partner is putting more cash up. Thoughts? Is 50/50 fair to both or should he get a larger return if he is putting more cash up? We have not had this discussion yet.

4) If we set up an LLC, do we open a separate bank account? How are our personal funds comingled?

5) How do taxes and payments to each partner of the LLC work? Is the profit from the flip paid out to each partner then taxed as income by the partner? Seems like we would be taxed double that way - the LLC would be taxed on the profit, then the individual partner would be taxed on income.