Commercial Real Estate FAQ With Ben Marks On CRE Property Investments & Brokerage

What Legal Structures Do You Use When Putting Together A Real Estate Investment?

The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful.

There are several legal structures you can choose from when putting together a real estate investment or deal in the commercial space. LLCs are a popular one, and SPEs are as well. Having your legal team structure your deal with you will ensure you have the right legal structures in place for any particular deal or partnership you may be making. 

Richard Wilson: What legal structures do you use while putting together a real estate investment? 

Ben Marks: So obviously LLCs have been our have been kind of our go-to entity, not SNC corps they’re unnecessary expensive, and again most of our stuff is single member LLCs or pass-throughs. That’s not only an advantage for liability, it’s an advantage for tax reasons. We, you know, have to deal with taxation, or distributions. So LLCs, SPEs, we do do partnerships – one of the key things that I have to thank our fantastic legal counsel that sits in DC who does this – they set up all of our partnerships as tenants in common. Lots of reasons for that but the simplest ones are if you ever have an issue, or a deal goes south, or one needs to buy out the other, or you’re both selling but one wants to do a 1031 but the other partner doesn’t, without having that kind of tick structure in place it can really cause a lot of complications. So I would say LLCs, ticks, and certainly making sure we operate efficiently and that everything fits into our stake plan for the family. 

Richard: Right, great. 

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Richard Wilson

Richard Wilson

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