The investors have equity in the company pro-rata according to amount of their capital contribution.  

My suggestion would be that you form a joint venture with a builder in which you contribute the lot (valued at FMV), the builder contributes the build costs. and you split the profits pro rata.

Even better is that the water is now being billed back to the tenants on a pro-rata basis and eliminates a huge water bill each month.After it's all said it done the property went from a 4.5% cap to a 6% cap when you factor in the amount of money that went into the rehab.

Very, very obviously all faked up.Another was when Christina was helping do demo (wearing heels if I remember correctly) when she encountered a rat.  A

In spite of that, I offered them $1,000 in cash, plus their security deposit, plus no pro-rata rent if they and their mountain of junk (I actually specified that ALL junk, theirs or not, had to be removed from the property) were gone by the end of the next week.Boy, did they come through. $1,000 in cash proved to be a huge motivator, got me a completely clear yard with no personal property left inside or out, and gave me an empty unit I could remodel immediately. 

The LLC's Form 8825 would include depreciation and the members' K-1s will include their pro rata depreciation expense.My question is how would you recommend accounting for depreciation in the LLC's internal records?

Do I split the recapture amount pro rata and $40k of it stays with the exchanged property and recognize $20k in recapture and $30k as cap gain?

Continually, their are things such as common area maintenance (CAM for short), which is typically reimbursed by the tenant passed on their pro-rata share of the office space occupied.Office space can be a good idea, but it really all depends on the numbers.

My favorite is the override method, where everyone gets an equity interest pro rata to their investment amount, but the lead can take a fixed % of cash flows to be distributed, but during and at the conclusion of operations.Example

In Commercial Property Management it is not unusual to split utilities based on percentage of space (pro-rata share) particularly with water since water meters are expensive.