setting up a company? llc?

Question

Hi

I bought a property in my own name to quick flip, but im stuck with it after the local market dropped so i cant sell, so im going to rent it out my questions are:

What do i need to know as an overseas landlord?, Do i need to set up a company or an llc?

Thanks

Dave

Bill Walston · Answer

As for asset protection, in reality, land trusts provide almost none.  Land trusts do not enjoy the liability protections that corporations or limited liability companies may enjoy.  Beneficiaries are held liable, which is why those who use land trusts usually name LLC's or corporations as the beneficiary.

Bill Gulley · Answer

Most investors I know of are paranoid about landlord liability. Ask them how many times they have been sued and most will say never.

Listen to what Matt said, get insurance. Speak to an attorney where you are. Not many tenants I ever bumped into for a modest dwelling had the money, time or legal knowledge to seek a suit against someone overseas...I mean really!

Make sure you have a decent PM, have recourse if they mess up and have insurance and with one property, I wouldn't consider all the fluff. Be realistic. Good luck

William Ware · Answer

David
I have a local PM company (near your property) that has an in house attorney that I've used to set up both of my LLC's. email me and I will send you the names.
Bill

Matt R. · Answer

Gulp, that's a lot of paperwork to handle a single property.
I just have an LLC + Landlord insurance with a liability coverage for asset protection.

You don't strictly need to set up a company or an LLC to rent out your property.  But you should consider asset protection in case your tenant slips and falls.  Many small landlords seem to do just fine with no LLC and a nice cheap personal umbrella policy that provides coverage for up to a couple of $$million for pretty small premiums.

Do you have a local mangement company or trusty person to take care of things ?  That would impact the overall headache-factor by ensuring you get good tenants who won't trash the place.

David France · Answer

Great thanks Bill, im currently looking for an agent

Chris Weiler · Answer

Hey Colin, would you mind explaining how land trusts provide anything more than anonymity? It was my understanding the only way a LT provides asset protection is when you have an LLC be the beneficiary. Please email me a copy of 30 benefits of using land trusts.

Colin Bochicchio · Answer

David,
Actually the trustee would collect the lease payment and these trust only work in the US I don not how the UK structures their land trusts..

A land trust protects the title/deed due to the holds both the legal and equitable title to the property thus they own and you now are assigned a beneficial interest so you effectively control but own nothing.
That means a creditor can not look up your name on property you own and lien the title if they can it can prove to be very difficult to sell w/o settling the debt first and provide a clean chain of title.
You also have a degree of asset protection as well of the beneficiaries in the trust and I can on and on.

This is why a beneficiary in your property can NOT claim equitable interest due to the trustee has equitable title.
We take full advantage of US tax laws in how the trusts are setup..
We follow federal law..
Ralph: I appreciate your input on LLC's and aware of LLC setups and would probably do that unless it was an involved setup..thanks for the advice though.

The trustee is the management and collection company yet your LLC can also enforce it as well in being a beneficiary..
If you forward me your email I will send you the 30 benefits of using them in your investing.. a good read and no soliciting just wish to provide helpful information.

Do what is best for you I just wish to illustrate the advantages in using land trusts to control property..

David France · Answer

Thanks for the replies.

Wow thats alot to take in, an llc and insurence is what im most inclined to do for know, how much does it cost to set up an llc?

So a land trust is to protect the title from a liable case? i dont understand what this means, could you please explain? we dont use them for rentals in the uk, all we do is get landlords insurence and that covers everything.

So a beneficery would collect rents? is this the management company?, i dont have an agent lined up, can anyone recommend one in inkster MI?

Thanks everyone

Ralph Freshour · Answer

Colin,

You can do the S Corp or LLC filing yourself by using the services of one of the many online legal firms specializing in this. It will save you money vs hiring a lawyer to do it for you.

Colin Bochicchio · Answer

Matt,
Yes there is more paperwork in getting setup but I believe it is worth it to avoid liability.

It really is very easy to do I just gave David some ideas in how we use LT to gain more advantages for all parties thus creative investing.

Typically when these entities are setup they are in autopilot and all you do is get your check from the trustee each month..
Insurance is something else entirely and yes that goes without saying a good policy is needed.

You need to protect the title from the lawsuit that hits you so you need good insurance and a LT IMHO to stop any charging order or threats to the property.
It is also nice to not have your name on the county records so you are off the radar screen.

I just went into detail to give examples of how you can remotely administer a property via your designated trustee very simple to sign off on one letter..??

setting up a company? llc?

Most Popular Reply