Offering Percentage Ownership of Commercial Real Estate LLCs

Many of us want to get into commercial real estate but few of us can manage. Reasons for this can range anywhere from lack of time to lack of funds. For whatever reason, there is a rather simple solution: percentage ownerships of LLCs present a great opportunity to get into this area of real estate.

Why a LLC?

One of the best ways to invest in real estate is by way of LLCs which offer a percentage ownership option. LLCs, or Limited Liability Companies, are a loose business organization that offers its members some protection against personal liability. Keep in mind that this is not always the case and ultimate liability is dependent upon a variety of factors. LLCs are perfect for businesses that are owned by one person who nevertheless needs the startup capital that can be offered up by partners. Investing in commercial real estate through an LLC tends to be rather lucrative especially when you receive a percentage of ownership.

Benefits of Percentage Ownership

Percentage Ownership is used to determine the amount of equity or income received by any one person from the property. Now, this amount is usually figured by taking the amount that one puts into the property and dividing that by the worth of the property. Often times, the value one puts into the property is not necessarily money but could also be services done for property and the LLC. The benefit of this is that you do not necessarily have to have as much capital as other investors in order to see some kind of return. When offering percentage ownership, make sure to appeal to the smaller investors who have an interest in real estate but maybe not the means necessary to break into the market.

Drafting an Agreement Using a Lawyer

Since you are entering into an agreement with more than one other person, it is important to draft an agreement that is mutually beneficial to all involved. You certainly do not want to enter into anything feeling as if you are being cheated. Sometimes people find it hard to draft an agreement without a lawyer. The attorney will be able to mediate the drafting process and can create a legally binding document which will protect everyone involved. A lawyer will know all the important points to include in an agreement, including the percentage of interest each party holds in the LLC, voting power, and how exactly the entire LLC will be managed.