You definitely will want to consult a good business lawyer (with demonstrated tax expertise) and possibly a real estate attorney. If you find a corporate lawyer with real estate AND tax expertise, that would be optimal, and there are lawyers out there with this mix of expertise.
One of the numerous advantages of not putting all of the company's properties into one entity is that, unfortunately, you and your brother may come upon an irreconcilable difference, even though it may be difficult for you to imagine right now. Should that happen (and if (a) each of you holds 50% of the singular entity and (b) you are unable to reach agreement on how to transfer a portion of the various rental properties to another entity so that you can amicably separate your interests from one another), you could find yourselves in the midst of a lock-up (where you and your brother - each holding 50% - cannot make and carry-out decisions for the company, reach agreement on obtaining financing, etc.). The likely result of a "lock-up" that does not get resolved is a "dissolution" (i.e., paying off creditors and the shareholders are left to divvy-up the remainder of the assets). Of course, no one enters into a business "expecting" a lock-up (especially brothers), but lock-ups should be planned against and accounted for.
It is very typical for "each" of the rental properties to be held by its own, discrete corporate entity (usually an LLC, depending on the tax treatment one prefers) and then the various entities are held/rolled-up into a singular holding company.
You are thinking correctly. You need to see a good business lawyer in your area who specializes in business matters. As you have pointed out, the dangers of not doing everything correctly can be a disaster in the case of death, divorce, bankruptcy, insolvency, one person wanting to leave the business, a disagreement, etc. You also need to make sure both of you treat this as a business and not just family. Hammering out issues now means fewer major disputes later. It is often beneficial for both parties to have a lawyer. Actually trying to divide the homes within a company may or may not be a good idea, but you can accomplish what you want. It may even be a good idea to create more than one entity.
Wise logic on your part. See a business and real estate lawyer to make sure you do this right. I am not a business lawyer and when I had a similar issue I hired someone to draft all the documents. It just makes sense.
A business or real estate lawyer should be good. Further you may want to advise you brother about a prenuptual agreement with his wife to be.
The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.
I suggest a business/contracts lawyer with real estate transaction experience.
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