So myself and 2 co-workers who all share a common interest in REI have decided to team up and form a 3 way partnership to help split the duties and financial risks between us. We have decided to use the BRRRR method.We are each starting with an initial contribution of $10k and splitting the profits (after all expenses and contingency funds) based on our ownership percentage, starting at 1/3rd each initially.
My question is really, how do we structure the purchase of our first property such that no individual is at risk of being screwed if it all falls apart? I understand that as a new LLC a lender would probably require a personal guarantee and it's likely that we will need to use one of our credits for a credit pull. How do you purchase a property as a 3 person entity so that all 3 hold equal ownership and all 3 on the hook if it goes wrong? I trust them but still wouldn't want to take full responsibility for the mortgage without any legal protection.
Our lawyer suggested that we talk to lenders (in progress) and get under contract before officially forming the partnership LLC.
