I am involved in a multi-state partnership that is interested in investing and flipping homes in New Jersey. One of our partners has an established LLC in North Carolina and the LLC is pre-approved for hard money loans. My question is this: Should we continue under the LLC when investing in NJ properties and have the two NJ partners be added as agents to the principal to conduct business in NJ or should we establish a new LLC in NJ for all three partners? The issue with the second option is that we would have to go through the pre-approval process to secure hard-money loans and we would be unlikely to get as favorable of rates as the existing currently enjoys in NC.
I would recommend reading outstanding CPA @Brandon Hall 's recent blog post on partnerships and entities: https://www.biggerpockets.com/renewsblog/flexible-...
It would definitely be easier to utilize the existing LLC and invest as members (not agents), but may not be best. A lot depends on if you've worked together before, plan on having this ongoing for future deals, etc.
Consult with competent legal and tax advice, of course. Good luck@Jason Timmerman !
note. NJ charges 2% on the way out (sale) if the owner is not a resident of NJ. Dont know how that falls on LLCs. May want to look into that.
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