Q: LLC Formation for Real Estate Investment
I need to form an LLC to buy and operate a rental unit. Three members are brining 1/3 investment each. Can there a buy-out clause such that one member can be bought out a year or later when two other members can bring the capital equal to the initial investment of third member plus 6% annual interest?
A: The answer is yes. A limited liability company is well-suited to this sort of enterprise, as its operating agreement can specify terms (such as those you describe) for member buy-outs, transfers among them, or addition of members. I have organized LLCs many times with such provisions. Contact me to discuss setting up the LLC quickly and efficiently.
A: yes, but with several issues ... management issues, capitalization protocols, any improvements ... and of course, valuation formula ... always best to schedule a few free consultation video calls with at least two law firms to discuss the options and strategies.
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