Hope I'm not putting the cart before the horse but my partner and I want to split our first deal and many more 50/50. He lives in New Jersey, I live in South Florida and neither of us want to invest in our own states. I have an LLC set up in Florida currently as a sole member. After I register to do business in our state of choice (let's say Texas) and we get a cashflow started, what's involved with paying him his cut every month as far as taxes are concerned? Will I have to add him to my LLC or will he have to create his own?
Thanks in advance,
Avoid the 50/50 LLC if you can.
Do it in your LLC and pay him his half on 1099.
You will own property 100%. Your partner 👌 with that?
If LLC owns property I sure would like half ownership of said LLC..... but that's just me.
Thanks for your advice, I'll discuss the 1099 with him.
@Eric Adobo - True, that is something I'll have to discuss with him as well. Ideally I want this partnership rock solid from the jump to avoid any future headaches. I just don't know tax wise if there are better / smarter ways of setting things up regarding the LLC for our buy and hold strategy.
I would spend a couple hundred dollars and meet an Accountant/Attorney specializing in Real Estate . A good one always stays up to date with new tax laws and loopholes for benefiting Real Estate investors.