Hello, me and three friends want to start buying cheap, distressed properties, sometimes fixing them up a little bit before renting them out, predominantly to Section 8 tenants, and also selling the properties. These properties would be purchased in one town in FL, where only of us lives, but where all of us grew up. That one person has been going around to potential properties, talking to realtors, and lining of bids from construction firms. However, that same person will have less capital to bring to the table. As time goes on all of us will probably have unequal capital to contribute, though. What is a fair way to compensate the FL partner for all the extra time and effort he invests, yet ensure that his interest as a partner, not as a management company, dominates his decision-making? And how can we have "catch-up" provisions that allows a person to catch up to 25%, yet not turn that into an option for the person's unfair benefit?
We are thinking our opening up an umbrella LLC that owns each property through a separate LLC. Some people have suggested grouping 5-6 properties per LLC. What do you think about that?
Any help would be greatly appreciated.
We are thinking our opening up an umbrella LLC that owns each property through a separate LLC. Some people have suggested grouping 5-6 properties per LLC. What do you think about that?
Any help would be greatly appreciated.