The Easiest Way To Write a Real Estate LLC Operating Agreement
Whether you live in a state where operating agreements are mandatory or elsewhere, you should understand what they are all about and why you need one when you own a limited liability company (LLC) in the real estate business.
LLC operating agreements are not particularly easy to make—lawyers tend to be pricey, and contract templates aren’t the most reliable option. Fortunately, the world’s best virtual assistant’s got your back! Sign up for DoNotPay to create a real estate LLC operating agreement with zero effort!
What Is an LLC Operating Agreement?
An LLC operating agreement is a legal document that outlines the terms of governing internal operations of a limited liability company. It defines and regulates the duties and responsibilities of the owners and addresses the decision-making processes.
Having an operating agreement for an LLC is obligatory in several states in the U.S., including:
Even if you live in a state where having an operating agreement is not mandatory, you should consider writing one because it allows you to operate an LLC according to your own rules and conditions. Without an LLC operating agreement, your company has to operate according to the default rules and specifications of your state.
Why Do You Need an Operating Agreement for an LLC in Real Estate?
Real estate investors choose LLCs because they provide protection from personal liability—something that lacks when purchasing, owning, and renting properties as an individual. If you own an LLC, writing an operating agreement could be beneficial for several reasons, such as:
- Documenting basic information, such as the official name, address, and purpose of your company
- Securing limited liability protection
- Maintaining control over the internal operations in the company
- Specifying the percentage of ownership each member has
- Recording each member’s contribution to the company
- Defining decision-making processes
- Determining the distribution of profits and losses
- Creating official meeting schedules
- Formalizing important decisions about:
- Ending the partnership
- Selling and buying the shares of the company
Get Your Real Estate LLC Operating Agreement With DoNotPay’s Help
Hiring an attorney to draw up an operating agreement for your real estate LLC can cost a small fortune. Depending on the number of members in your company, plans for growth and investment, and the law firm you choose, an operating agreement can end up costing you from a couple of hundred to several thousand dollars.
Luckily, that is not the only option! The world’s first robot lawyer—DoNotPay—offers a fast, simple, and low-priced solution! With our Standardized Legal Documents tool, you can get your hands on a customized LLC operating agreement in a breeze by following these step-by-step instructions:
- Access DoNotPay
- Type LLC Operating Agreement in the search bar
- Complete our chatbot’s questionnaire
DoNotPay will generate an operating agreement for your real estate LLC in no time. Bear in mind that the agreement is not official and legally enforceable until you and your partners sign it.
Can You Write a Real Estate LLC Operating Agreement on Your Own?
Yes, you can write an operating agreement for a real estate LLC by yourself, but it is far from easy. With a basic Google search, you can find a ton of samples for creating a contract on your own. Unfortunately, relying on contract templates is not the best idea when it comes to real estate LLC operating agreements because they should contain provisions that are closely related to your business.
If you still want to write a real estate LLC operating agreement on your own, there are some general and other, more real-estate-specific terms to cover:
|What Should a Real Estate LLC Operating Agreement Cover?||
|General information||The agreement should state the following information regarding the LLC:
|Member details||You should include each member’s:
|Management structure||Every LLC operating agreement has to specify the company’s management type (hired or member-management), as well as meeting and voting information|
|Financial information||This section should include the following information:
|Capital calls||Making a capital call is sometimes the best option if your real estate LLC needs extra funding. When that happens, having predefined terms can save you a lot of time and effort|
|Profit and loss distribution||The agreement should establish a distribution model—preferred return on investments according to the members’ shares in the real estate LLC|
|Interest transfer||You should define the terms of buying and selling interests between the LLC members|
|Tax regulation||This section should address issues such as tax returns and major developments in the business|
|Miscellaneous||You should go over all the details of operating your real estate LLC with other members and include additional relevant terms and conditions in the agreement|
Do You Need Some Other Legal Document? See if DoNotPay Can Help!
DoNotPay is the most convenient and affordable option for creating many real estate contracts besides operating agreements. Take a look at some legal documents we can draw up for you:
- Bill of sale
- Estoppel certificate
- Non-compete agreement
- Promissory note
- Parenting plan
- General business contract
- Non-disclosure agreement
- Quitclaim deed
- General affidavit
- Prenuptial agreement
- Intent to purchase real estate
- Child care authorization form
- Residential lease agreement
- Independent contractor agreement
Keep Your Money Safe With DoNotPay
DoNotPay Is a Time-Saving App
DoNotPay helps you sort out these tasks and much more in only a few clicks.
Get your revenge on robocallers, report text scammers, find validated clinical trials, claim your warranties, get in touch with your loved ones in prison, and protect your creative content—all in less than five minutes.
No more hours-long phone calls, emails, or in-person visits.