I'm trying to figure out how to structure a 3-way partnership where we each are equity partners. We are all out of state investors. The goal would be to lower the barrier of entry so we can acquire property after property. Rather than 1 property every year or two myself, we could purchase several in the beginning and scale rapidly within a few years. Is a real estate lawyer the best to consult for this type of question? If so, do I need to consult a real estate lawyer in the state I plan to invest in or any state? Do we need to form an LCC and transfer funds into some kind of escrow account that will disperse on properties we decide? I feel like I'm stair up a mountain right now and don't know which is the right path forward. Any advice is appreciated.
It depends. If all the investors are living in one state, it probably makes sense to form the LLC in that state and do the operating agreement there. If the investors are from all the different areas, you have a few different options. You could form the LLC in the state where the investment sits. Or you could pick a "neutral" state like Delaware or Wyoming.
In terms of what kind of lawyer to use, that also depends. Not all real estate lawyers are expert at dealing with multi-member LLCs. So you should ideally find someone who has expertise in that realm in addition to real estate. But as a general rule, you probably should engage local counsel for handling the deal itself. So let's say you form an LLC in MD but invest in PA. You would hire a lawyer to form the LLC in MD and you would hire a separate lawyer to handle the deal in PA.
You could also go with a multi-state law firm. But they tend to be much more expensive. So it's typically outside the price range of most folks.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
I had ranges from $780 to $1600/yr. I went with $780 since it was replacement cost and very similar to all other plans. Idk why everyone quoted me so high to replace a brick duplex. It costs 145k and some were telling me it is going to cost 300k to replace. Others 200k. Insurance is such a racket.
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