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Lora Krulak
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group investment / forming an LLC

Lora Krulak
Pro Member
Posted Jan 29 2024, 08:52

Hello!

I am investing in a new development with some others. This is our first investment together. Other than forming an LLC what other things do I need to do / look out for.

Thank you so much 

Lora

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Randall Tannen
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Randall Tannen
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Replied Jan 29 2024, 09:05

@Lora Krulak I may be biased, but having a competent real estate focused tax professional on your team is a big one.

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Sean O'Keefe
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Sean O'Keefe
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Replied Jan 29 2024, 16:40

@Lora Krulak dedicated bank account for each property / new development the LLC invests in. You'll also want to designate someone to be lead on taxes and finance since these things will get out of hand if you wait and try to get caught up mid-year.

.

Insurance if you don't already have it. 

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Paul Crosby II
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Paul Crosby II
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Replied Jan 30 2024, 09:08

 I would suggest having an attorney on standby as well. 

An LLC is nice but you should have documentation and process around member duties, how to liquidate one's ownership and how you will exit properties to name a few.

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Basit Siddiqi
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Basit Siddiqi
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#5 Tax, SDIRAs & Cost Segregation Contributor
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  • New York, NY
Replied Jan 30 2024, 12:12

As you have a discussion with an attorney, discuss the following items

1) What is the proper allocation of profits / losses to each partner / member
2) What happens if a member dies?
3) What happens if a member wants to exit / sell his interest
4) What is each member's responsibilities?
5) When will the business terminate?
6) How much will each partner contribute?

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Lora Krulak
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Lora Krulak
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Replied Jan 30 2024, 17:00

Thank you all so much. That is all very helpful