Investor · Grasonville, MD · Member since 2017 · 453 posts · 415 votes
Working with an investor in Maryland who has multiple units for sale, could do seller financing on just one or bring in another person outside my LLC to try to buy everything to get the best discount possible. This outside investor doesn't want to loan on the properties but actually wants an equity stake.
How could that be structured? I'm in an LLC with one other person, and this outside investor is buying in his personal name. Would the LLC own 50% and him 50%, or each of us at 33 1/3? Is it an entity partnering with an individual?
Investor · Grasonville, MD · Member since 2017 · 453 posts · 415 votes
8y
@Steve Vaughan Thanks for the reply Steve. I believe he'd like to do a JV because it's near where I live and he's about 1 hour away. That way I or my business partner in the LLC can handle the property management for all the properties.
By breaking them up, we could always do the property management for him for a fee, but then that would entail being a PM for someone else and taking on whatever additional liability or costs that entails in Maryland.
@Steve Vaughan Thanks for the reply Steve. I believe he'd like to do a JV because it's near where I live and he's about 1 hour away. That way I or my business partner in the LLC can handle the property management for all the properties.
By breaking them up, we could always do the property management for him for a fee, but then that would entail being a PM for someone else and taking on whatever additional liability or costs that entails in Maryland.
It’s definitely sounds cleaner to break them up.
Sure, Ken.
Especially since he wants to be a passive investor, it would be much simpler to be a member of your LLC if these are the only assets that will be inside it. He owns personally, he's on his own. And you're right, managing for others without being licensed spells all kinds of trouble.
People fear what they don't understand, like being an LLC member. I guess he either figures out it's better to own as a member or you all get into a tenants in common messy deal. I'd probably find a new investor if he insists on trying to own personally and passively at the same time. Too much trouble.