Questions About 4closure Investment Group
I have initiated talks with two other partners about establishing a Real Estate Investment Group in the New York City area. The three of us would constitute the principals for the entity we eventually establish. There are three other individuals who are to be tapped for funds as silent investors. There will be a total of 600K in cash to pursue foreclosure and pre-foreclosure deals.
I will be the deal maker and day to day manager but minority monetary contributor. The other two principals will contribute 100K each while supporting any repairs/renovations a property may need. The three silent partners will simply reap a return on their 400K contribution. The goal for the group's first deal would be to wholesale to establish a track record.
Question (1)
What would be the appropriate entity for this venture?
Question (2)
What would be the appropriate distribution of ownership and/or shares in the entity?
Question (3)
Should the group consider something other than wholesaling?
Thank you for your input.
1. It depends, and not really on the makeup of the partners. Look at tax implications, manageability, etc. I would think that a LLC would be fine, but get good local legal advice on this one.
2. What's the best deal you can cut for yourself? This is business. (BTW if these partners are friends, expect there to be problems, which will affect the friendships.)
3. Consider whatever makes you the most money. If none of you have any experience in this area, I would look for deals and find the one that brings you the most cash, then learn that area. No reason to limit yourself to one method if you are new to all.
[addsig]