Eli and Vicki met for 1.5 hours with Doug Kelly at Useless Bay.
His advice (not official)
- this is a complex deal. buying the property is only the beginning. the rubber hits the road when you develop an operational plan – roles, responsibilities, what work compensated and how, what work is simply community chores, who keeps the books. All of this, it seems, can be expressed in our llc.
- Cleanest way to do the deal is for VR to buy the property as a sole owner and then lease it to the LLC with a long term (10 years for eg). this is how they did it at Chinook. Fritz and Vivienne bought the land and then over time sold it to the institute.
- THEN we form the LLC and work out all the details of how we will run our for profit and non profit businesses. He suggested three areas of operating agreements: certificat of formation (starting llc), writing by-laws which governs how we will manage property, and a joint use agreement which governs daily life on the ranch – duties, chores, roles, responsibilities. He said the hardest part isn;t buying the land – it’s how you operate it after it is purchased.
- decisional power in LLC is equal
- Decisions re major changes to land or buildings need to clear me as the landowner, tho if it has passed the LLC with me as a member it’s unlikely I as landowner would block it.
- Landowner determines how much needs from the land each month to cover all expenses (tax, ins, loan payoff)
- Doug is now our lawyer. He is $250 an hour (yikes) but he said at the end of the deal he’ll reduce the bill. the eg of reduction he gave was ~ 40% less than total. And he said this is a complex deal with a lot of money changing hands and to not risk doing it ourselves.
- suggested we talk also to a CPA and suggested Steve Bass who does a lot of non profit work
- Stop trying to take care of Linda! she has to deal with her financial problems – they are not ours. We have not committed to $630,000 and probably should offer less.
- Should not offer her a loan to cover mortgage.
- can add to closing contingencies that we have interviewed all the neighbors and verified that they will not block what we want to do with the land.
- we can do an llc or a subS corp. the cpa could help us understand which.
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