Legal Question in Real Estate Law in California
Real Estate & LLC Question Please: 1. I want to purchase an expensive home and invite people globally to join me. 2. I want to borrow the funds from them and I am NOT offering an interest rate and I am NOT promising them any ROI (so it's not classified as an investment or security with the SEC). 3. I am offering to manage the home and let then use it also. 4. Because the home is expensive and the loans are large, I want to use an LLC to make everything legal and legitimate, reduce liability, allow any pass-throughs on expenses, establish guidelines via the Operating Agreement etc. 5 The LLC would be set up as "manager managed" with me as manager and the people I'm borrowing from would be set up as silent partners with non-voting memberships. 6. After 10 years, I would sell the home and pay back the lenders according to the Operating Agreement. Questions Please: 1. Is that legal? 2. Do I have any securities problems? 3. Should I include the LLC or just do the loans or is there a better way to set it up? 4. Any other feedback is welcome. Please Note: if you're a licensed real estate Attorney in CA and you're interested in this type of arrangement, I would be open to including you and/or hiring you contingent upon negotiations and a NDNC. Feel free to e-mail me with any questions. Thank-you for your time and interest. Mr Bowen San Diego CA [email protected]
1 Answer from Attorneys
1. Probably, depending on how you set it up. 2. Probably, depending on how you set it up. 3. LLC sounds best, but depends on the details. 4. Hire a lawyer; this is way beyond anything you can safely do without one.
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