A partner and I are buying a multi-unit on terms from a seller for a good price. Thinking about taking title in a Trust with one of us or one of our LLCs as trustee and our respective LLCs as equal 50% beneficiaries. Any cash needed for rehab (and any profits) would be split 50-50 as per the Trust Agreement. Seems preferable to the hassle of a 2 member LLC, a partnership, or a JV. We’d pay taxes on our respective shares. Or do hidden complications await?
to me it sounds like a lot more hassle to do it your way than a simple 2-member LLC.
one entity that provides the protection and split you desire or 3 LLC’s and a trust? Overkill.
If you and your partner already have LLCs established, then why not take title as tenants in common with your respective LLCs as joint tenants?
Why bother with a trust and another LLC? I don’t see that you have anything to gain.
Wouldn’t that mean our LLCs would appear on title, and thus online for all to see? I’d rather bury actual evidence of ownership in a Land Trust Agreement to minimize the potential that opportunistic attorneys would file frivolous lawsuits on wealthy owners (!?!) like me.
I’ve used a land trust as a partnership vehicle and found it works quite nicely. Just go and get a EIN number for the trust as you will have to do a partnership return. However, no hassle of filing paperwork with the state, etc. You can use one of the LLCs to act as the trustee.
As I understand it (I am not an attorney), there are serious consequences (fines, penalties, etc.) for filing a fivolous lawsuit. I would expect a creative and wealthy owner such as yourself would view the fivolous lawsuit as just another source of income.