Straight Up Chicago Investor Episode 394: The Legal Nuances of Different Real Estate Partnership Structures
Aug 19, 2025
In this discussion, Bibek Das, an Attorney at Das Law who specializes in real estate law, shares invaluable insights on the legal intricacies of real estate partnerships. He discusses the critical differences between partnership agreements and LLCs, emphasizing the need for clear operating agreements to mitigate risks. Common pitfalls in partnerships, such as vague roles and the importance of transparent decision-making, are also covered. Bibek further highlights the necessity of regularly updating legal documents to stay compliant and protect investments.
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LLC Shields Personal Assets
- An LLC separates personal assets from property liability by making the company the legal owner of the building.
- A partnership leaves each partner personally liable for claims, so LLCs provide crucial liability protection.
Choose Management Structure Up Front
- Decide whether the LLC is member-managed or manager-managed before starting and document it in the operating agreement.
- Assign clear day-to-day decision authority if you want a single manager to run operations without constant member input.
Always Create An Operating Agreement
- Draft an operating agreement even if the state doesn't require one because banks and lenders will expect it.
- Also obtain an EIN and file articles of organization so the LLC can operate and be recognized by banks and tax authorities.