@Charles Kennedy if the management fee is at 5.6% and the payroll is running at 9.7%, wouldnt that make my total property management at over 15%, and I should be around 10%?

I pay them, on payroll, $11/hour. 

This will require a sophisticated software (electing to use Appfolio) and well documented processes. 

Bab Adetiba I’m not sure what state you are looking at but My initial thought is you may have to add payroll into the equation.

Just factor it as a cost of doing businessWhile California deems the LLC is doing business in California doesn't necessarily mean that the fund will have California state sourced income.If the LLC files a partnership return and all the payroll, property and sales are outside California - The LLC will not have any California state sourced income.

Your role is to protect your interest.Arrangements like this typically require 3 sophisticated or represented parties.It is possible that 1 attorney could set up a new LLC (or other org) with each current LLC becoming a 1/3 member.  

I have looked at some notes on that site and you can tell there are some pretty sophisticated sellers selling to some really unsophisticated buyers.

no problem its not real complicated you just don't know what you don't know until you experience it.you want your experience or knowledge to equal or exceed your buyer so you can best position yourself. for not in the business land owners selling to developers.for me the short to do list is1. first and foremost talk with your CPA and make sure they understand what your doing.. don't want to box yourself into a tax situation you don't care for.2. tight contract.. remember builder/developers by and large are sophisticated buyers.. so need to level the playing field.. this is not some wholesaler trying to snake a property.3. once figure out have a good RE attorney draft the contract don't use standard board of realtor or MLS forms.. it should be a custom contract in my mind..

This means you will likely be actively managing it yourself, or you will have a manager in place that will eat up a large portion of your revenue (payroll expense).

This means you will likely be actively managing it yourself, or you will have a manager in place that will eat up a large portion of your revenue (payroll expense).