share ownership with sister on one property only

3 Replies

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.


Originally posted by @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.


Just create a JV (doesn't even need LLC) for that one property that you jointly own. Keep the others separate.

As soon as you bring her to your existing LLC, you will complicate things.

One loan doesn't mean everything needs to be under one LLC.

@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.

@Ryan McCook you also need to consider tax ramifications. You have one loan across two different legal entities., which is not ideal. It could cross expose the assets for liability. Also be careful when tracking funds. I assume that one loan paid off four loans. Determine the percentage split between each property and claim interest deduction against the property based on the split. In other words if 21% of the loan went to paying off the property you own with your sister, then 21% of the interest expense is allocated to that property as an expense. If you took cash out of the deal, that is allocated separately.

If you are saying that all four properties are now owned by your LLC, that implies she gave up her share. I would give her a percentage of your LLC based on her share of the total value. If all four properties were worth $100,000 and she owned half of one, then she has $50,000 share of $400,000 or 12.5%. Another option is just doing a cash buyout with her.