Partnership Brainstorming Checklist

[Jess Archives]

BiggerPockets Questions

Partnership Structure/Accounting Checklist

Hi all I understand the advice you may give is an opinion. I’m curious on what they maybe

I was wondering if my ideas to form a partnership structure makes sense.

I'm planning on drafting and LLC and an Operating Agreement to be reviewed by a legal professional and my partner.

Here are some key points I would be curious for feedback on:

- Transferring partner's money from my bank to an Account under the LLC

- Right now I am planning to purchase a deal without it being wired to the Account under the LLC as it's not yet formed

- When the LLC is formed, the distributions will be made from there to our individual accounts

- Both of us will get personal umbrella insurance. Does the LLC require additional insurance?

- What extra steps can I expect during tax time for the LLC since it's not a sole proprietorship?

- Should I form the LLC in Delaware as we may buy from different states? But mostly MO/KS

- How should cash out refinances work? Hold the property in a land trust with the LLC as trustee? We're both planning to buy in our names and hold the conventional loans in our names up to the max

- 20/80 Money Split. I’ll be doing the majority of the work. 50/50 distribution including cash out. After the initial cash out, the partner will own 80% of equity