All Forum Posts by: Miguel Sinclair

he dosent want to earn interest, and he is funding the at cost of all rehab/construction.  Then we all split the profits.   I understand it seems one aides but he approached us, he wants a certain return on investment we can deliver on.  My father in law is not making a dime in rehab, he's doing everytbing at cost

thanks for all the suggestions, and in no way am I trying to take advantage of my brother or don't understand the magnitude of his contribution... If anything I want more detail to help him/us.  HE IS NOT LOOKING TO profit from any interest rate... At all.  He even wants to know how to funnel the money back into the business.. If that possible?  I should have made that more clear.  He simply wants separation in the event someone comes after the company... He is the first lender.  An additional safety net and shield of protection.  My concern is bc of our insurances, this is an unnecessary, elongated step in an otherwise straightforward process.  Costs money and time.  We let him know full well that he was assuming financial risk when he came to us to want to invest.  We by no means deceived him or let him to believe anything otherwise, it was him who approached us bc of our skills.

 I just want to understand if this is a necessary step because it will cost more money and take more time, and intern affect the profit margin.

Thank you for the advice.  He isn't looking to profit from the interest rate, but how can he even funnel that money back in?  It just gets hairy and it seemed easier prior.  

Here's the situation and I need advice to bring to the table within the next few days. Myself, my brother and my father in-law have decided to form an LLC and flip houses. why? I have a full time job but a lot of free time, adn can manage the company and every project . My father in law is a contractor will all the resources and can do work at cost and my brother has 500k to invest. Initially I was intimated, not feeling I was contributing much, but quickly realizing this would never materialize without my time and work. Fast forward we're closing on a house. Since we have the cash, the closing process is much more straight forward and we avoid a lot of bs. Quick fast and convenient. Here's my issue I'm facing. My brother last minute, is having a change of heart in dumping 300 k into the business and instead, is looking into having our LLC, of which we are all equal partners, take a loan out or mortgage from his personal account, to then repay. What are the complications, legal ramifications, additional expenses, pros cons, of instead of dumping money straight in, having a partner make the LLC take out the loan. He is claiming he wants to create a barrier between his investment, but we have several types of insurances for this. Not to mention, if he is essentially going to become the bank, why not simply take out a loan from a bank, and pay them back, sure at a higher rate but NOT having to split the profits... Please advise, I apologize for my lack of knowledge this is new to me. I want to protect his money, but not at the complication and additional expense... What's the play here?

I want to protect my brothers money, but is this process a time consuming additional expense that will only cause complication ps come tax season?  

Here's the situation and I need advice to bring to the table within the next few days. Myself, my brother and my father in-law have decided to form an LLC and flip houses. why? I have a full time job but a lot of free time, adn can manage the company and every project . My father in law is a contractor will all the resources and can do work at cost and my brother has 500k to invest. Initially I was intimated, not feeling I was contributing much, but quickly realizing this would never materialize without my time and work. Fast forward we're closing on a house. Since we have the cash, the closing process is much more straight forward and we avoid a lot of bs. Quick fast and convenient. Here's my issue I'm facing. My brother last minute, is having a change of heart in dumping 300 k into the business and instead, is looking into having our LLC, of which we are all equal partners, take a loan out or mortgage from his personal account, to then repay. What are the complications, legal ramifications, additional expenses, pros cons, of instead of dumping money straight in, having a partner make the LLC take out the loan. He is claiming he wants to create a barrier between his investment, but we have several types of insurances for this. Not to mention, if he is essentially going to become the bank, why not simply take out a loan from a bank, and pay them back, sure at a higher rate but NOT having to split the profits... Please advise, I apologize for my lack of knowledge this is new to me.