All Forum Posts by: Tom Kidd

Aaron K, thanks for the response. What you're saying makes sense since I wouldn't want to loan money to an entity without significant collateral or cash flow either. However, I guess I don't see that as a downside peculiar to LLCs since if we would have purchased the units in our own name or as a true partnership, personal assets would still be at risk. Am I missing something as to LLCs? 

I own 4 units through a two-member LLC. All our financing has been through my local credit union where I personally bank. It has generally gone well though the credit union has required my personal guarantee of the loan. This hasn't been a big issue since the amount finances has generally been manageable. But my partner and I are looking to purchase more units and I'm getting more skittish regarding additional personal guarantees. I would love to be able to finance just through the assets of the LLC, but I'm thinking that is unlikely. At what point, have you been able to convince a financial instituiron to drop the personal guarantee? Any strategies to get this to happen?

Definitely interested in this. I'll have to see how Monday goes.

@Ned Carey, thank you for the response. Both me and the other partner are looking for cash flow so we're interested in holding rentals. I appreciate the simplicity of your suggestion. It wouldn't be that difficult to value the contribution of services since I would be handling the legal services for evictions when needed, and he would be handling the maintenance (at least at first). Depending on where we purchased, he would also be the one who would be much closer for the purpose of regular communication with tenants. As you said the LLC could pay me for legal services as needed and him for maintenance as needed. That would probably be the simplest method.

Alternatively, I was thinking of giving him a larger percentage (than his capital contribution percentage) for profit distributions, and for capital distributions (after the initial capital contribution were repaid) since I suspect his services will be needed more often than mine.  However, coming up with a new percentage reflecting services rendered seems a bit arbitrary.

Hello all! I'm Tom Kidd and live in SW Ohio. I'm an attorney, more of a litigator than a transactional guy, but interested in becoming more of the latter as I get old and want to stop fighting with all those young turks.

Anyway, my question is I am looking to form an entity with a close friend. I will be bringing more money to the table. He will be bringing more construction/repair knowledge. Typically, I would base the profit distribution on the initial capital contribution, but I am not sure if that is equitable in this situation as his skills will likely be needed more often than my skills as an attorney. We do not intend to flip homes,.Thoughts on how to determine a just allocation in this situation? All suggestions are appreciated.

Hello all! I'm Tom Kidd and live in SW Ohio. I'm an attorney, more of a litigator than a transactional guy, but interested in becoming more of the latter as I get old and want to stop fighting with all those young turks.

Anyway, my question is I am looking to form an entity with a close friend. I will be bringing more money to the table. He will be bringing more construction/repair knowledge. Typically, I would base the profit distribution on the initial capital contribution, but I am not sure if that is equitable in this situation as his skills will likely be needed more often than my skills as an attorney. Thoughts on how to determine a just allocation in this situation? All suggestions are appreciated.

Hello all!  I'm Tom Kidd and live in SW Ohio.  I'm an attorney, more of a litigator than a transactional guy, but interested in becoming more of the latter as I get old and want to stop fighting with all those young turks.

Anyway, I am finally ready to get involved in real estate investing after many years of exploring options.  (I read John Staub and Kiyosaki many, many years ago so it is about time.)  Anyway, my question is I am looking to form an entity with a close friend.  I will be bringing more money to the table.  He will be bringing more construction/repair knowledge.  Typically, I would base the profit distribution on the initial capital contribution, but I am not sure if that is equitable in this situation as his skills will likely be needed more often than my skills as an attorney.  Thoughts on how to determine a just allocation in this situation?  All suggestions are appreciated.

And, I'm glad to be here at BiggerPockets after lurking and listening to podcasts for years.