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Updated about 4 years ago,

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Josiah Mouw
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Initial Contribution on LLC Operating Agreement?

Josiah Mouw
Posted

My business partner and I currently hold an investment property in our names via an unsecured note. Our initial financing attempt through the broker channel collapsed a week before closing, so we pivoted to a local bank. We'll be transferring title to our recently-formed LLC, and then financing with the same local bank for a number of reasons (not because we think an LLC offers impenetrable liability protection). For our LLC operating agreement, which we need to submit to our bank, what would an investor list for "initial contribution" in our case? Can any of the expenses we've incurred to acquire the property— and rehab the property— be considered initial contributions even though initial financing was not via our LLC? Any advantages or disadvantages?

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