share ownership with sister on one property only

[Ryan McCook]

Here's my scenario:

I financed 4 properties with 1 loan to take advantage of some better pricing. One of the properties was co-owned by me and my sister, the other 3 properties I owned solely in my own LLC.

Is there a way to create some form of agreement (joint venture agreement perhaps) or give her an ownership portion of my LLC, but rather than her owning a certain % of the LLC, we want her to own 50% of the one property.

Appreciate your input.

[Eamonn McElroy]

@Ryan McCook

What you're describing is possible, but it's going to require a (more) complicated operating agreement.

If the goal is the legal protection of the LLC, it would generally just be simpler to form a new LLC and contribute the TIC property into the new LLC in exchange for ownership. Then, you have your old SMLLC with three properties and a new MMLLC with the one property.

Keep in mind you're creating a partnership return filing obligation for the MMLLC if you go this route, and that's going to increase your compliance burden and administrative overhead.

It might be advisable to explore whether or not you need the LLC or if risk mitigation can be handled through insurance and best practices.