LLC with another investor

[Daniel Dellanno]

Hello, Looking for some advice. Im am a new investor looking to buy my first property. Most of my capital is from a partner. However I plan on doing deals by myself and with others in the future. Should We set up separate LLCs? How would you approach this?

[Ashish Acharya]

Originally posted by @Daniel Dellanno:

Hello, Looking for some advice. Im am a new investor looking to buy my first property. Most of my capital is from a partner. However I plan on doing deals by myself and with others in the future. Should We set up separate LLCs? How would you approach this?

If you create an LLC with another partner, it will be taxed as a partnership. It will file its own return. Depending on what is your strategy, make are you talk with the lender to ensure you can finance the property in the LLC.

If you create your own SMLLC and he/she creates his own SMLLC and both of your LLCs will form the partnership to do the deal. Individual LLCs are reported on your 1040. The partnership created by Two LLCs will file its own partnership tax return. Again talk to the lender first. 

If you have your Own LLC, it can later do its own deal or invest with other partners in the future. There are other ways to do this too but you need to sit down with an advisory and present your case in detail.