I checked the FAQ and didn't see this covered. I need to form an LLC for some properties that I am buying in 2018. I can go to the state website and do it myself for free (not including state filing fees), go through legalzoom for about 175 and I can pay extra for them to file it for me again every year, or use a lawyer which will cost about $500 for the lawyer's time. Which is the best way to go?
It all depends on what you want. If you are creating a single-member LLC (no partners), you don't really need an attorney to put that together. BUT, if you are creating an LLC with partners, you need an operating agreement that sets guidelines for how the business will be operated and if done properly, also sets exit strategy for partners should anyone want to get out, then I would suggest using an attorney.
If you are OK with doing the work yourself to set up the LLC via the state website, then tackle that yourself.
If you would rather have someone else handle it for you, along with annual reports, then the LegalZoom option sounds like the route to go.
Clint C. Galliano
@Clint Galliano Thanks for the input. I think I will go with Legalzoom since it will be a single member LLC with my wife as the manager. I assume the marriage certificate trumps the operating agreement so not to worried about partner dissolution lol. Plus they can act as my registered agent so I don't have to do with mail solicitations or put my personal address to public.
Just curious, what are you trying to achieve with the LLC? If it’s simply for liability protection, an umbrella insurance policy might work better. I was initially going to put all my properties in an LLC, but after doing the numbers and looking at the level of effort to ensure that protection from a potential “piercing the corporate veil” liability doesn’t happen, I went with an umbrella policy. Just wanted to share my experience so you can make an informed decision. Good luck.
@Ty Man Thanks for the input. I don't think the Piercing the Corp Veil issue is too big as long as you keep your monies separate (which you should be doing anyway) and conforming with some small formalities. A good lawyer or lawyer service (legalzoom) helps. I might do both LLC and an umbrella insurance policy.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.