Newbie Needs Help With Partnership
Hello,
I am a newbie and reading everything I can. However, I need help.
I am going to form a partnership (LLC) with a family member to start out in REI. This person has the funds and excellent credit history to get the ball rolling. I will do all the legwork. We are looking for a few quick flip properties to start.
Now here is my dilemma, once we make a couple decent sells, I would like to branch out and invest in a couple single family homes to rent out for myself (not with the partner). My partner has no interest in renting. How would I persue this without getting into a family feud? In other words, I would like to take some of our profits and go out on my own (outside the LLC).
Any suggestions will be greatful.
Thanks,
Paul
You can simply set up another entity owned 100% by you and do your own investing activities. There is no limit to the number of entities you can own as far as I am aware.
I'm just assuming, but you are splitting the profits correct? You should be able to do with your portion of that as you wish. I would approach the family member and tell them what you are thinking of doing? Ask if you can invest your portion of the profits in rentals and he/she invest their portion of the profits in rehabs. If they say no, I would then take your portion of the profits and create your own LLC or inc.
Good Luck!
How are you going to divide the profits? Thats all you're asking, really. This could come when you dissolve the company or need some extra cash.
You need to discuss (and put it into writting) how and when profits can be pulled from the company. What percentage must (if any) be reinvested.
Thank you for the good advise.
Paul