Trying to Start a LLC

Me and my 2 business partners are trying to start a LLC. What are some of the best companies to start one with or can we do it ourselves. I have one property and my other friend has two properties. Can we put all 3 properties into the LLC and how do we do that? Any advice is greatly appreciated.

Edited: 06/26/2010 at 05:53AM

Jason F

Real Estate Investor · Gainesville, FL

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Icon_minipost Sep 22 '08, 01:15 AM

Well, in Florida, you would have to 'sell' your properties to the LLC. That would require you to deed the properties from yourself to the LLC which means closing costs, as well as some tax consequences.

This might be a problem if you have mortgages on these properties. The lender must be notified any time you 'convey title' on the property to someone else.

What is the purpose of you guys doing this? You need to consider what happens when you all have different opinions of what to do with each other's properties. Owning a portion of the LLC, you will own a portion of it's assets and so will your friends.

Why not just set up an LLC and, moving forward, use it to buy houses.

Edited: 06/26/2010 at 05:58AM

Kristian Peter

Real Estate Consultant · San Diego, California

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Icon_minipost Sep 22 '08, 05:23 AM

Set up a quick LLC - the easiest place is www.legalzoom.com

Then Quit Claim Deed your properties into the LLC - you can add 1 property of 1000 properties, it doesn't matter as long as the membership in the LLC is always going to be the same.

You cannot buy properties directly into an LLC if you are using conventional financing - you will need to have a guarantor for the loan, or put up a hefty down payment. You will want to purchase the properties as an individual, and then move them - although, this will also show up on the individual's credit report. There are some non-recourse loans available, so that the loan does not show up on credit, but then again, the down payment would be big.

Just my 2 cents...

Edited: 06/26/2010 at 05:58AM

Jason F

Real Estate Investor · Gainesville, FL

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Icon_minipost Sep 22 '08, 10:23 PM

If your LLC qualifies for the loan you can buy them using just your LLC as the guarantor. But that means your LLC needs to be making enough money or have enough assets to qualify for the loan without a guarantor.

Don't personally buy them and then deed to the LLC. Why wouldn't you just buy under the LLC with you as a guarantor on the loan? Either way, your name is going to be on the loan.

Edited: 06/26/2010 at 05:58AM

Peter Vekselman

Real Estate Coach · Atlanta, Georgia

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Icon_minipost Sep 24 '08, 11:27 AM

Hi,
Setting up an LLC is a simple proposition. You can do it yourself quickly and easily, but some investors are more comfortable having it done for them.

You can do it yourself by filling out the paperwork (available from your Secretary of State) and paying the appropriate fees.

If you have it done for you, be forewarned: A lot of these online "services" will gladly take thousands of dollars from you, fill out the paperwork, and give you an official-looking leather folder for your trouble.

Don't overpay for this service. If you're not comfortable doing the paperwork yourself, by all means hire a pro. Just don't pay exorbitant fees.

The decision on whether to buy in the name of the LLC or individually is your call, but there aren't nearly as many lenders that will allow you to buy in the name of an LLC.

Good luck!

Peter Vekselman

Edited: 06/26/2010 at 05:59AM by Peter Vekselman

Jennifer Butler

Residential Real Estate Agent · Utah

21 posts
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Icon_minipost Sep 29 '08, 11:35 PM

Edited: 06/26/2010 at 06:02AM by Jennifer Butler

Gregory Davis

Real Estate Investor · Owings Mills, Alabama

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Icon_minipost Oct 03 '08, 02:03 AM

Your best bet is probably an online service, since they're far more cost effective and starting an LLC is absurdly easy.
Alternatively, you can even go to your state's Dept. of Assessments & Taxation (or its equivalent) and get their template form, often for free.
It's not rocket science, I assure you, and your real estate investments will be safer for it.
Greg

Edited: 06/26/2010 at 06:03AM by Administrator : Website Promotion REMOVED. Create a signature if you want links to your blog.

Alfred Castillo

Residential Real Estate Agent · Bronx, New York

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Icon_minipost Oct 12 '08, 11:15 AM

How do does the transfer of properties from the person to LLC in nyc goes?

Edited: 06/26/2010 at 06:07AM