Investment Group. Profits/Tax Distributed?

Hello. New to real estate investing. I would like to start an investment group with 4 friends from college, all with that same entrepreneurial drive. Obviously, cash to invest is limited so we would like to pool our money in order to meet necessary down payments. Looking at both rental properties and pre-construction.

I have many questions but to start:

  1. Any success stories out there?
  2. How would profits and taxes be distributed?
  3. Obtain a mortgage as secondary residence? I hear it is difficult to obtain mortgage in LLC name.
  4. Any examples of business plan?

I appreciate all your advice and expertise in advance. Thanks.


Use an LLC; profits and losses are distributed to all members of the LLC according to the LLC operating agreement (i.e. you determined that when you set up the LLC). This is accomphished using a form K-1 which is then filed with each members’ tax return.

Your LLC will have probably limited or no income so plan on one or more members having to use their credit and sign to get the loans.

There are plenty of good books out there on this topic. Invest $30 at Amazon before you jump in.