Starting a Series LLC?

8 Replies

I live in Chicago and I plan on opening my business as a Series LLC. My question would be in which state would it be best to open it and why. Even just a finger point in the right direction will help. Thank you!

@Jamil Rivera always best to form in the state the income is generated. If you form you company in Texas, let say, if you ever need to go to court, you have to travel to Texas. Also, you owe Texas taxes for IL income. (as an exAMPLE)

good luck!

@Jamil Rivera

As @Ibn Abney stated you can create an LLC but for the protection it should be in the state where the property is located. You can register as a foreign entity and register it in each state. I think if the goal was to provide asset protection an attorney would recommend an LLC in the state where the property is located. I have a series LLC in Illinois for my Illinois properties and a Wisconsin LLC for properties in that state.

Good Luck.

Thank you for that info. Now I live in Chicago, but plan to buy out of state. Mainly in Florida and in Georgia. That means i should open up an LLC in each one of those states??

Originally posted by @Kenneth Garrett :

@Jamil Rivera

As @Ibn Abney stated you can create an LLC but for the protection it should be in the state where the property is located. You can register as a foreign entity and register it in each state. I think if the goal was to provide asset protection an attorney would recommend an LLC in the state where the property is located. I have a series LLC in Illinois for my Illinois properties and a Wisconsin LLC for properties in that state.

Good Luck.

I thought in Wisconsin, series LLCs don't provide legal protection for each LLC, but rather, are treated as one company in a Wisconsin court, essentially eliminating the conceptual benefits of the series LLC?

@Casandra M.

Correct.  Wisconsin doesn’t have the benefit of the series.  Illinois on the other hand does.

One of the best ways to publish what you own to all plaintiff attorneys is a series LLC. One stop shopping at the Secretary of States office. When you have a minute Scroll through series LLCs with the word property in them. Almost everyone of them becomes a HEY SUIT ME list,

In Illinois Choose a business entity to direct the properties. It should own NOTHING!

Own each property in a separate Illinois Land Trust that rents to the business entity

Your business entity should have the right to sublet to future tenants.

If you get a lawsuit filed against you the plaintiff's attorney can open any LLC series or otherwise and see what you own. So 15 groups in a series is at least 15 properties to pursue.

They can also request production of your income tax records as they look for asserts.

Under the 2018 Tax Cuts and Jobs Act the best tax treatment is an S-Corporation. Contact an assert protection attorney and a tax attorney for specifics.

The rule of thumb would be whichever state has the strongest liability protection paired with the least fees. This article covers three of the most popular states to form [Series] LLCs in regarding those criteria. Ideally you will want an experienced attorney who can set up the entity in a way to ensure streamlined operation as well as anonymity. I personally lean toward Texas.

This is not legal advice, just my opinion as a real estate investor.

@Scott Smith thank you. I have a call to a firm down in Texas. Their prices seemed relatively responsible not too cheap to bring up and red flags and not too expensive for me to think I’m getting ripped off. This is is called fair and fair. They also property and are very knowledgeable. Now since I haven’t personally used them I can’t endorse. Just by what I gathered from them and asking about their business and their fees, it’s a big possibility that I will be working with them.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

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.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here