75/25 Partnership Additional Funds Dilema
So I just ran into an interesting situation with my duplex property. My partner and I want to do some renovations to get it up to market rent. The equity %s are my partner has 25% and I retain 75%. Lets say that the renovations cost $4k, how much money are each of us responsible for? Is it 50% each or would it revert back to our equity percentages? Under the additional funds section in our LLC operating agreement it only mentions that the money can be borrowed from either LLC member or an outside source. When I run the numbers I believe it makes sense to use the equity percentages since the cash on cash return (based on the rent increase) is the same. See below picture for the run down:
