Setting up LLC with all protections posible in place

9 Replies

Every once in a while I get this "offer" from Al Aiello to buy into his program that supposedly generates a 121 page LLC articles to include all kinds of contingencies to make sure it is protected on every level possible via the LLC. Now I'm NOT about to buy this over priced software from some internet guru, but it does make a good point. Does any one know of a post or book that covers the same sort of details/ items. Hoping to close on first property this week and while I know lot of folks say I don't have to do this right away I want to get started on it since I'm shooting for 3 - 5 properties this year. I've already shook hands with Murphy and I'm not giving that turkey another shot,. I have way to much riding on this to not get that ball rolling. Yes, I understand there is more to it then just the LLC aspect but I have to start some where and LLC is as good as any place/

Hi @BA R.  

Stay away from guru CDs listen to this podcast 109. 

http://www.biggerpockets.com/renewsblog/2015/02/12...

In This Episode They Cover:

Forming an LLC right off the bat

The ins and outs of Insurance vs. Assets

Ten things you need to know to protect your assets

What exactly an Umbrella Policy is and why it might not do what you think it will

Why you shouldn't put all your properties under one name

What you should know about the Delaware Statutory Trust

Scott's advanced strategies for real estate investors

Everything you need to know about LLCs vs. Trust Funds

Who you need as part of your team when investing

And SO much more.

THANK YOU!!!!!!!!

You are most welcome. Good luck

@BA R. How many members are you putting in the LLC? Is is just you? Are you try to buy and hold? Flip? You sound really locked up about investing and forming an LLC. You in have more risk getting hit over the head by someone walking in the front door of a house your looking through at 5AM in the morning. Get back to the basics with real estate and you will accomplish all your goals.

Frank

I've been reading every thing I can get my hands on, designed to educate the  completely new and know nothing  inexperienced "dummies" like me, for over a year now.  I LOVE amazon reviews! I HAD my BIG failure and boy did I ever royally mess that one up! NOT taking any chances this time. It is pure over kill to the point of  a reasonable expenditure  limit of available funds to do this versus until I hit diminishing returns on cost.of layers and every thing else that will eventually be involved. Anal would be the appropriate word to describe me in this. 

At present I am TENTATIVELY planning on setting up a 2 or 3 trust as members with 1 or 2 as a manager or co-managers with MAYBE 1 natural person and a registered agent for address. One source says put the property in an LLC and have the llc be a beneficiary, ( I want to say that came from " financial self defense" by Hillel Presser) One source says put it in a trust and connect it to LLC. ( bigger pockets page?) The devil is in the Details.....

Other then that,  as I acquire properties, each will have 2 llc's , one as a holding company for assets and one as operational. I  have not really made up my mind yet. Part of the details I will HAVE to get an attorney for since in the long term estate planning portion of all this, I  am accommodating  special needs trust issues and a family trust. Right now , the immediate focus is on making sure I get the details right  to set up layering the property I plan on closing on  this week.

Any suggestions , comments, experiences, even countering opposing viewpoints with a why as to your viewpoint would be MOST GRATEFULLY APPRECIATED! Thanks

Here's y suggestion, stay the heck away from podcasts, in each one the is an agenda behind it, same with blogs. Your concerns transmit to me that you're almost paranoid due to the lack of knowledge, don't mean that in a snotty way, but RE is rather easy, actually, there is little risk so long as you deal honestly, ethically and legally. It's the lack of knowledge from a conventional sense.

Don't learn legal aspects from forums or someone selling something. Go to law review sites, Harvard Law Review, read state statutes, look at legal forums, look up cases dealing in the areas that you are interested in. Look at law text books.

People to talk to: An attorney, your accountant, your insurance agent, regulatory offices (they don't give legal advice but will tell you how they interpret laws and regulations) in some aspects, your municipal and county offices, speak to title insurance agents, appraisers, as applicable.

No LLC Articles and Operating Agreement can cover every possible event. Standard LLC articles may default to state law, if you don't state how profits are to be shared then it will be based on partner's contributions. Local jurisdictions will impact how your company will be seen, only a local attorney can advise you as to how some judge treats some situation.

I realize these types of posts are entertaining, but this isn't a law school and so far, no attorney has chimed in.

Your very best protection is INSURANCE, not some business formation! Good luck :)  

Hmmmm... Good advice. Thanks

I agree with @Bill G.  I have also been bogged down with all of the information that attorneys feed you on setting up multiple layered LLCs etc., etc. in the past.  I find it funny that the folks selling a product always feel that their solution is the best and you are going to lose everything if you don't have coverage x or agreement y.  I'm not sure how some of these folks drive down the road everyday after they sit around and analyze every possible worst case scenario.

For better or worse, I decided to setup an LLC with a decent operating agreement and have standard insurance coverage. However, most importantly I hope to always treat folks fairly and ethically. If one day I'm unfortunate enough to loose it all to a lawsuit, I'll sleep just fine knowing that I have more knowledge now and will be able to earn it faster the second go around.

I know plenty of folks who have made small fortunes in real estate that couldn't tell you what an LLC is. What they did focus on, was investing in real estate.

This also makes perfect sense and is sort of what keeps coming to my mind. The guy I bought the house I just sold from had it all in his name.

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