LLC setup for GP and LP

5 Replies

So I have found a mid sized multi family property and to take it down I am bringing on a single limited partner to fund the downpayment. I'll be the single General Partner for the deal and already have bought properties in another LLC (disregarded entity). I want to use the first LLC to be the GP for the second LLC and have the limited partner inside that one with a clearly defined operating agreement agreement.

Am I setting this up correctly to ensure protections of both parties and to ensure I don’t mix my previous rentals in with this one?

Thanks, here’s hoping my offer is accepted.  

@Eric C. If I’m reading this correctly you have a SMLLC and that entity will be the GP in the new structure with the other member, the LP?

This works, if I read it correctly. Make sure your operating agreement or partnership agreement clearly articulates your intent.

Good Luck!

Originally posted by @Brian Boyd :

@Eric C. If I’m reading this correctly you have a SMLLC and that entity will be the GP in the new structure with the other member, the LP?

This works, if I read it correctly. Make sure your operating agreement or partnership agreement clearly articulates your intent.

Good Luck!



That’s exactly what I have. Thank you that’s what I thought just wanted to make sure before I start spending time energy and money on the process.   

@Eric C. you are using the term General partner. Is the structure holding the new deal going to be a Limited Partnership? 

What is the size of the new deal and what is the size of the current deals in your LLC? Are you aware you are combining the risks of all your deals into one LLC? Do you want the risk of one deal taking down all your deals?

@Eric C.

If you really want asset delineation and separation, I wouldn't make my existing RRE LLC the managing member/GP of a new LLC/LP with a third party. Engage an attorney. Perhaps it makes more sense to hold the managing member/GP interest directly or through a new asset management LLC.

Originally posted by @Eamonn McElroy :

@Eric C.

If you really want asset delineation and separation, I wouldn't make my existing RRE LLC the managing member/GP of a new LLC/LP with a third party. Engage an attorney. Perhaps it makes more sense to hold the managing member/GP interest directly or through a new asset management LLC.

I was trying to make it like a spoke and wheel. My main LLC (which is just my wife and I) would control all the other LLC's. My current LLC only has one 6 unit deal inside it And I don't plan on adding anymore to that specific LLC, and just create LLP for deals going forward that I have a partner with.

But it makes more logical sense to just create a second LLC that controls all of them including my current one.

John D. Rockefeller once stated, “Own nothing, but control everything.”  That was my thoughts of how to do it.  I don’t want my name anywhere on public record that I own these properties.  

Guess it’s time to get out my flow chart again and start some planning for the future. Oh and call a real estate Attorney,  Thanks. 

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