Opportunity to start LLC

2 Replies

I've been approached by a friend (call him A) to be part of an LLC company that would buy properties for rehab and rental. A has been working with his father business the last year that owns commercial real estate and franchises of fast food stores. Total, not including myself, there are four others involved in the company. Three are friends (including A) and the fourth is A's fathers who owns the previously mentioned company that is into commercial real estate and franchises stores. So there's someone with extensive real estate experience and success involved in the business.

There's an initial cash investment into the company that would be shared equally by the 5 partners . So I'd be on the hook for 20% of the startup cost and would hold the same amount of equity in the LLC.

We are currently looking for real estate to purchase in the LA area as the first deal this company does.

I wanted to post a general high level summary of my situation to get the discussion going and see if other BP members are involved in similar situations. If so, I’d love to hear your experience and any advice. What questions should I be asking prior to investing in this company? Thanks in advance for your help!

Visit with your real estate lawyer and your CPA before you put anything in writing.

Experience in commercial properties is far and away different from residential rehab and rental.  Be careful.

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