Can you give some advice on how to create LLCs in GA

Question

I want to create a separate LLC for each of my properties in GEORGIA.

Can you advise me on a step-by-step what I need to do to do that?  ...and how to write an Operating Agreement and anything else I need to do so that my LLCs are set up correctly?

Thanks for your help!

Max James · Answer

I realized the same thing with the umbrella policy as well.  If I got that, all of my premiums would have gone up for car and what-not.  If you are going the LLC route, I would probably pay a lawyer to do that.  Ask around your area for recommendations.

Since I'm still starting out and have a small amount of other assets, I'm not sure an LLC makes sense for me.  Once I have a family and say I get sued and my own personal home would be able to be taken away, then I'd be in a different scenario.

Carol D. · Answer

Max,

Thanks!  Yes I think it is a matter of protection not of "need".  And it is not likely I would ever have a lawsuit resulting in the need for an LLC but in our world of litigation anything is possible, so I am just trying to create another level of protection.

I listened to this podcast:

BP Podcast 109: You Will Get Sued. Here’s How To Survive with Attorney Scott Smith

https://www.biggerpockets.com/renewsblog/2015/02/1...

And if I remember correctly he suggested putting each property in an LLC and then creating a "Holding LLC" to be the owner of your other LLCs.

I do have $1 mil liability insurance.  I do not have an umbrella policy which I should probably get.  I asked my main insurance company and they will not do an umbrella policy unless they insure everything I own with them.

So I am thinking of following this advice of creating a separate LLC for each property... but I don't want to just go online and do that - I want to make sure it is proper so that it really does protect me should something happen.  So I know I need an Operating Agreement.  So I need anything else?  How do I write an Operating Agreement?  Is there a place on BP to find a template?

THANKS!

Max James · Answer

Is there a good reason why you want to create an LLC for your properties?  I just went through this exercise and determined increasing my insurance liability limits to $1 mil on both of my places was a better option.

Plus, if you already own the buildings then you trigger the due on sale clause in your contracts which will put you at risk of having to fully pay off your entire mortgage.

LLC's can be great for some people, but I'd do some more research to see if you really even need one.

Have you read this?

https://www.biggerpockets.com/renewsblog/2013/08/17/rental-properties-llc/

Steve Haight · Answer

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