I'm still a newbie so be gentle. I'm about to take the first couple of steps to becoming a landlord. From reading the forums and hanging out at local investment meetups it looks like creating an LLC to protect personal assets are a MUST if I am going to go into landlording. That seems easy enough to create an LLC. But financials are tougher.
The question I have is from the LLCs if I want to partner up (or several) a home to rent out. How would I go about doing this? I have a couple of people I want to work with but I want to be fair too.
Basically what I'm asking is how do I handle his/her money in a way that everything is legal and I can "pay out" the investor/partner every month?
For example I would take my $10K and his/her $10K and use it as a down and split the rent, minus a reserve for 50% rule and other things too such as a property manager for example.
Where do I go from here?
Hopefully that explains my question.
LLCs can be structured as a partnership or corporation if there is more than one member involved. Find out the pros and cons in the state(s) that you'll be operating in on which works best for you and your partner. You might want to have your attorney draw up a joint venture agreement whether its a limited partnership that expires in 2years or an ongoing limited partnership with no set date to dissolve. You can have as many LLCs as you can handle. However, I've learned that the IRS only provides one EIN(employer's identification number) per day. This may be temporary but that shouldn't deter you from your business as usual. Separate partnerships require separate EINs, separate bank accounts etc. That's if you want to take the best preventative measures and crossing all of your Ts and dotting all of your Is....
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