Group partnership: :

5 Replies

With an LLC you would all be members operating as a partnership. The operating agreement would spell out the roles, contributions and profit splits as well as lots of other details.

You generally would divide equity and profits parí passu in accordance with each partners contribution of time and capital.

The best thing to do would be to meet with a real estate attorney to go over this and draft the partnership documents.

There’s handfuls of information we would need to know before being able to answer your question. Are you flipping or hold and renting? Are all 4 putting in equal money? How do you want to split the profits? Is one person doing all of the work and getting a share of the profits? It’s a discuss to have with a tax professional. They will be able to educate you once they have all of the information.

@J Scott provided you great advice, I would follow that. 

@Greg Dickerson also gave great advice. A CPA AND attorney would be of vital importance here.

Additionally, your intent with the property will play a huge role in what entity you form and how it is managed. Consult with your professionals on this, don't skip that step, the cost to hire them is much less than the costly mistakes later.

@Wendy Hernandez

You may need to consult with an attorney regarding setting up some type of entity.
You should also discuss the operating agreement which will dictate how profit/loss will be split among the partners/members/shareholders.

You have to file a partnership or S-corp return depending on the entity you create. I would advise on reaching to an accountant who is familiar with this.