Understanding Your Risk in a Joint Venture (JV) Partnership
Whenever you’re going into a JV deal, you’ll almost always be inside an LLC where you’ll be a part owner of that company. A lot of times you’re protected because the property’s going to be owned by a limited liability company. So if anybody were to sue you or your partner, they can’t get to the ultimate asset. Take it in a more realistic approach, that it’s you and your friend that own this company together and bought this house. But your friend gets sued, and therefore there’s now a charging order against the LLC. You don’t know what a charging order is, look at one of the other videos that’s linked To this regarding that. In fact, what it is, is that if there’s any money distributed from the LLC it has to be used to pay off the creditors to the extent that your friend has an interest in the LLC. This would significantly hurt your friend because now he has to pay back those creditors that he might not want to. But, you can’t get any money out. This is not the case if you guys both enter into it with your personal LLC’s that you used from [INAUDIBLE] vehicles. So even if you have an LLC that you’re inside of for that LLC, use your own LLC to become members of the LLC used for the J D agreement This will allow you to distribute money that you can now control without having to pay off those creditors and hurt your friend or your business partner. Just keeps everything nice, smooth and amiable. My name is Scott Smith. I’m an asset protection attorney, I’m a real estate investor and I’m here to help you.