The Situation
JK
I want out of the Marquette company. I want my $800,000 back and whatever equity is left. I want to dissolve the partnership. The problem is the partnership itself. I want out. I want the liquidity.
A
Marquette LLC owns 12 buildings worth $6.2M. Total debt $3.018M to banks plus $800K to a private lender. John owns 50%. Eric owns 50%. Eric can't write John a check — his liquidity is tied up in the same portfolio. The deal has to come from the buildings.
The Portfolio
Marquette Real Estate LLC
12 buildings · 96 unitsOttawa / LaSalle County, IL
Portfolio value (conservative)$6,200,000
Total bank debt$3,018,576
Private lender (John's capital)$800,000
Net equity$2,381,424
Ownership50/50 · John & Eric
The Structure
A
Eric wants to keep the Marseilles buildings — his best cashflow assets. The deal: sell 8 buildings, Eric keeps 4. All proceeds pay off debts and taxes. Remaining cash plus the equity in Eric's 4 buildings = Marquette's total value. Split that 50/50. John gets his half in cash. Eric gets his half in buildings.
Step 1 — Sell 8 Buildings
Buildings Being Sold
Princeton (6 units)$385,000
Ladd 4-unit$230,000
Ladd 8-unit$435,000
LaSalle 7-unit$450,000
LaSalle 4-unit$250,000
Walnut (7 units)$325,000
Earlville Green Ridge (16 units)$1,020,000
Ladd Cleveland 12-unit$1,000,000
Total gross proceeds$4,095,000
After Paying All Debts & Taxes
Gross proceeds$4,095,000
Closing costs (5%)-$204,750
All loan payoffs (8 buildings)-$1,885,693
Taxes (recapture + cap gains + IL)-$349,453
Private lender repaid ($800K)-$800,000
Net cash to Marquette$855,104
Step 2 — Eric's 4 Remaining Buildings
Marseilles Portfolio (Eric Keeps)
1060 Orange Ave (8 units)$590,000 value · $270,000 debt · $320,000 equity
1070 Orange Ave (12 units)$860,000 value · $566,423 debt · $293,577 equity
390 Railroad St (4 units — free & clear)$290,000 value · $0 debt · $290,000 equity
Marseilles Ranch (8 units)$460,000 value · $281,720 debt · $178,280 equity
Combined value$2,200,000
Combined debt$1,118,143
Full equity$1,081,857
Monthly rent~$30,110
Annual cashflow~$225,300
The Final Split
Marquette Total Value
Cash from 8-building sale$855,104
Full equity in 4 remaining buildings$1,081,857
Total Marquette value$1,936,961
Each partner's 50%$968,480
John Kidd
FormCash
Amount$968,480
ObligationsNone
StatusFully out
Eric Fitzpatrick
FormBuildings
Equity value$968,480
Annual cashflow~$225,300
StatusSole owner
The Deal
$968,480 each
John gets $968,480 cash. Zero debt exposure. Zero ongoing obligations. Partnership dissolved.
Eric keeps 4 Marseilles buildings worth $2.2M, $1.08M equity, $225K/yr cashflow. Sole owner. No partner.
Before the Conversation with Eric
A
Then the first moves are preparation — not conversation. You want to walk in knowing exactly what you're owed and what the numbers say before Eric hears a word.
1
Real estate attorney
Illinois LLC dissolution, buyout rights, operating agreement review. One consult, ~$300–500. Know your legal position before any conversation.
2
CPA — confirm tax numbers
Basis on the 5 remaining buildings needed for exact tax figure. Federal, Illinois, depreciation recapture. Know the net number cold.
3
Appraisals on all 12 buildings
Establishes the non-arguable number. Neither party can dispute a certified appraisal. This protects John and gives Eric a fair basis.
4
The conversation with Eric
You're not asking permission. You're presenting options. He either takes the deal or the LLC dissolves through Illinois law. He has a good outcome here — $968K in buildings and $225K/yr. Present it that way.