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A friend has an LLC.?

Stay away from Partnership Agreements when you can accomplish the same thing with an LLC Operating Agreement. And ignore the existing LLC. Heres what you do. First, form an LLC in a state with very strong Charging Order protection like Wyoming or Delaware, each of you owning 50%, and draft your Operating Agreement to outline the exact terms of your relationship. The Operating Agreement is the key to the whole plan. Second, have the LLC form another LLC in the State where you are owning and operating the real estate investment, and then you have that LLC buy the property. If either of you are sued, and a Judgment results, the Judgment lien holder cannot get through the Delaware LLC to the LLC that owns the property, but can only get a Charging Order directed to the Delaware LLC. If the LLC that owns the property is sued due to a claim associated with the property ownership or operation, and a Judgment results, the Judgment lien holder might get through the weak-State LLC, but will arrive at the Delaware LLC, and will be stopped, and will be unable to get to either of you. A Limited Liability Company is primarily about limiting liability. After that, it is about convenience, flexibility, tax planning, and so forth. And for those things it is also better than a Partnership. I hope this helps. Michael Lantrip, Attorney | Accountant | Investor Michael Lantrip