My brother, dad and I would like to go in and purchase some land together.

We know we want to form and entity of some sort, but are not sure which. The property would be a ranch and not really produce any income. It would carry and Ag exemption and I think the entity would carry the loan.

We have come up with a few rules about ownership transfer and subdivision.

Does anyone have any experience with this? We only have a life planning lawyer. Can someone recommend someone in the Houston area? Any specific items in the rules that we need to include or address?

Are you paying cash or getting a bank loan?

Getting a loan.

The entity you form will be limited to what the bank will loan under. Call Texas Farm Credit, I think a sponsor here, and ask them. I am not familiar with land loans.

But having a separate agreement overlaying the loan is a good idea. Sorta like a will for the property that defines partnership, exit strategy etc.

I have been in contact with Texas Farm Credit. They agree that we should form an entity, but that we would need to decide between an LLC or Partnership or something else. That is what I was looking for feedback on. Should this be an LLC or something else.

Then what kind of rules we should make sure to have included going forward.

Gotcha. You are farther along then I thought. I'll let others comment on the LLC options. Good luck

I would recommend the LLC over the LP. The LLC is normally the entity of choice in Texas unless you are trying to qualify as a passive entity for Texas Margin tax purposes. This would be if your property had mineral interests, etc. but since you stated it will not make any income then this is not a concern. Most of my clients prefer the LLC over the LP structure for cost savings and administrative simplicity since with the LP structure the client normally has to form two entities since the general partner most likely needs to be protected.

I am a business entity/real estate attorney in Fort Worth and have advised numerous clients all over the state with your exact situation over the years and I would be happy to assist you unless you just want to stay local in Houston. If interested, you can shoot me a PM and we can discuss over the phone if you want more specifics.

With either the LP or LLC structure we can incorporate the governance controls and transfer restrictions that you and your family have discussed. We have drafted all types of agreements to cover the family property situation and dealing with different generations and their needs.

Good luck.

Definitely an LLC. I have formed a few of them with family and they seem to work best for what you are talking about (Im not a lawyer). The bank will require you to have a company agreement executed between the two of you, so get a lawyer to help you, its worth the money to do it right.

Have you called Capital Farm Credit? They are sponsors on TexAgs.

I agree with the recommendations for an LLC as well. I have posted several times about the option of the Texas Series LLC as well. I am also not in the Houston area, but I regularly assist clients across Texas with the formation of entities and suggestions regarding asset protection. Let me know if you would like to discuss.

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I agree with the recommendations for an LLC as well. I have posted several times about the option of the Texas Series LLC as well. I am also not in the Houston area, but I regularly assist clients across Texas with the formation of entities and suggestions regarding asset protection. Let me know if you would like to discuss.

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Are you a human? I feel like every time I see one of your posts you are talking about how you have posted about the series LLC before

Fighting Texas Aggie: We have people that come the the Real Estate board regularly and some who are first time visitors/posters. Some posters are quite familiar with the formation of Texas entities/options and others don't have much, if any, knowledge of Texas entities and/or asset protection strategies. I post about the Texas Series LLC as it is an option, often a very good option, for those seeking to form a business entity in Texas. I also work with the traditional llc, corporations (not formed as often as in the past), asset protection strategies, real estate investments, etc. I post/respond to the specific question that is being posed and offer assistance to those that are interested. I'm sorry it that is robotic to you, This message will terminate in 3, 2, 1, - Gig Em

I don't understand why a series llc would even be mentioned if they are buying a singular piece of land?

The main reasons would be flexibility, anonymity, and potential monetary savings. A series llc is a normal llc until the "series" portion is used/necessary. The series capability/flexibility may never be used, however, it costs the same to form a series llc and a traditional llc. In the event the person/member of the series llc ever wants to open an additional llc, they already have an entity in place to accomplish such goal and they don't have any additional startup costs, filing fees, etc. Also, there can be anonymity in any series that are formed.

I was mostly just kidding, I think the entity threads just interest me so I see your posts more frequently.

$300 in additional costs is insignificant when protecting a $200,000 investment. That's my hang up on the series LLC. For $300 I'll let someone else test out the limits.