TWO FRIENDS POOLING MONEY TO BUY INVESTMENT LAKEFRONT LOT – LLC? GENERAL PARTNERSHIP? PROS/CONS?

When you sell 3 years from right away for the large distinction (wishful thinking), does the single form of tenure good the others? What is cheapest approach to get the partnership formed? interjection the garland in advance

{ 4 comments… read them below or add one }

KatyBell October 29, 2010 at 10:41 am

One bit of advice, make sure, if you are married to consider that. We owned property with someone else and when their marriage went to the dogs. The property was in jeopardy.

Hopeful Home Solutions October 29, 2010 at 10:59 am

An LLC will give you better protection than a General Partnership. In a GP, if the other partner gets sued personally for something that has nothing to do with your investment, or divorced, they can come after the property you own together.

You should talk to a lawyer and even a tax accountant to discuss your specific situation though.

Go on your State Corporations website (do a Google search) to see what you need to do. It’s usually some simple forms. You can also use a web service like legalzoom or the like, and they will do everything for you for a fee.

Good luck.

Ed Atun October 29, 2010 at 11:34 am

Just buy it in your names. Unless it is $4Million dollars you don’t need to worry. No LLC . No partnership.

Christopher B October 29, 2010 at 12:24 pm

The cheapest way to do this is just buy the property in both names. Nothing is spelled out, so it is assumed that the purchase and the proceeds are split 50/50. However, you can work out whatever you want.

Depending on how big of a purchase this is, it may not be the smartest way to do this. The bigger the purchase gets, the wiser it would be to have a legal contract drawn up, and at least do this as a limited liability partnership.

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