I'll try to make this simple as it can probably get a little confusing from typing. I have an LLC with a partner and we are investing in properties under this LLC. We have a few friends and family members who would like to invest in real estate through our company. What would be the best way to structure all of this? Most of these private investors would like to have monthly cashfkow rather than a big payout. Is there anyway these private investors csn have some kind of ownership of properties but it still be managed and dictated by our LLC? My partner and I plan on talking to an accountant as well as a lawyer about this. Thanks in advance for your reccomendations!
I would look into forming an LLC that includes your investor group and having that LLC become a non-managing member of your LLC.
I have done something similar to this with two of the properties I own. One of the easiest ways to do this is having them as percentage owner of the LLC. In addition to the LLC you need a lawyer to draft an operating agreement that everyone will sign. In this document it'll dictate who is managing, how decisions are made, and how payouts are done.
Just as an aside, paying out monthly will I had lots of work to your bookkeeping. I recommend add most pain out on a quarterly basis to keep the accounting more simple.
Feel free to shoot me a message if you have any other questions about this. It’s not very complicated thankfully, but it does require a little money and a lawyer to make sure everything is done correctly. ￼￼￼￼
@Dave R Ludolph If your friends/family would rather have monthly cashflow, why not keep it simple and just have them be your private lenders? They could loan in first position with your LLC as the borrower. I'd argue this is safer for them with less downside risk, and you'd still retain full control of your LLC. It'd also avoid you having to figure out how to incorporate them as members/owners to your already-established LLC (something they probably don't even care about).
Just my opinion.