Real estate, LLC, and investors - Chicagoland Sportbikes
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post #1 of 7 (permalink) Old 04-05-2008, 02:23 AM Thread Starter
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Real estate, LLC, and investors

Say I have an LLC and a property i wish to purchase with 2 friends. Everything is an even split 1/3rd.

Would they have to become partners or have interests in the LLC? Or could it just be in the operating agreement that everyone has a third stake in that property and everyone gets a third NOI, etc.

If they do have to become partners, would that change the way the LLC is taxed? I was thinking that staying taxed as a sole proprietor is the way to go.

Of course i will seek professional advice.... just wanted to see if anyone knew before monday
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post #2 of 7 (permalink) Old 04-05-2008, 02:57 AM
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wow this can go so many ways, but honestly you need a business attorney

he should be able to handle both issues with the best advise.


good luck, wish i could be more helpful.



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post #3 of 7 (permalink) Old 04-05-2008, 08:59 AM
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Quote:
Originally Posted by Odyssey View Post
wow this can go so many ways, but honestly you need a business attorney

he should be able to handle both issues with the best advise.


good luck, wish i could be more helpful.
+1 to what Ken said. You need to speak with an attorney. You don't want to get any bad advice to later find out that you should have consulted an attorney. Those sometime prove to be costly mistakes. CYA!

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post #4 of 7 (permalink) Old 04-05-2008, 09:15 AM
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Go see your accountant or lawyer...but you're headed in the right direction.

FWIW, he or she will tell you that you should each have your own single-member LLC (disregarded for federal and IL income tax purposes) that you use to purchase your undivided fractional (1/3 in this case) interest in the property (tenants in common).

With this set up you have the following:

(1) the corporate vail provided by the LLC

(2) no partnership for tax purposes

(3) no income tax compliance for the LLC

(4) no IL replacement tax liability

(5) no need for a new multi-member LLC operating agreement (pship agreement)

(6) the freedom to roll your investment in a tax free exchange separate from your co-investors ("1031 like-kind exchange")

(7) the requirement to file 2 extra pages with your federal tax return

Oh by the way, your co-investors don't need to have their own LLCs; they can invest in the property directly but it wouldn't be prudent.

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post #5 of 7 (permalink) Old 04-05-2008, 12:23 PM
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Quote:
Originally Posted by Odyssey View Post
wow this can go so many ways, but honestly you need a business attorney

he should be able to handle both issues with the best advise.


good luck, wish i could be more helpful.

I totaly agree, don't waist your time with any attorney. get a Real Estate Attorney this is the person that I've used:

Joseph V Maggio Law Ofc Llc
345 N Quentin Rd Ste 401, Palatine, IL 60067

(847) 359-8313

good luck
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post #6 of 7 (permalink) Old 04-05-2008, 02:25 PM
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get a Real Estate Attorney
+1

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post #7 of 7 (permalink) Old 04-06-2008, 12:29 PM
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+2 on the Real Estate Attorney (sorry I thought that was a given)

Rhasheeda
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