As I want to do real estate investing seriously, My first Step is to create a Real Estate LLC for Tax benefits and legal protection.
I want to do this on Legal Zoom, in Florida (advice of my lawyer, he said don't pay for me to do it, you can do it with this website) , the package offers :
1. Economy LLC : Preparting the article of organization, validating the entity name of the LLC ($79)
2. Operating Agreement, EIN and Licences ($199) [Operating agreement alone is $99, OP Agreement + EIN is $159]
3. They offer Registered agent for $249 / year but I wanted to go with Corporate Direct registered agent ($125 / year)
4. in Option : Legal protect where they can review some documents for you and you can have 30min calls with attorneys , Tax pros (30mins / month) , access to their library of forms and legal documents ($40 / month)
5. In Option : Total compliance package ($280 / year) to submit minutes (company minutes to State compliance filings)
What do you guys think of this package, and which of the options is better for me to get started ?
I wanted to go with 1. 2 . 3 (Corporate direct) and the rest I will figure it out later if I need it or not
Any other Tips you recommend before forming the LLC ?
Hi Jonathan - How are you?
I am actually in the process of creating a Florida LLC(I made a submit this past Thursday).
1. You can check the status of your name using the
Make sure the entity name you choose is not listed in the search. If it is, it is okay aslong as it is not listed as "active" or "inact/UA"
2. Operating agreement for $99 is a good deal.
3. You have the option of not requiring a registered agent since you live in the state of Florida. However, it you choose to use a registered agent, I seen prices less than $125 a year.
Some things above that may be left out.
The cost to submit the "articles of organization" to the state of Florida is $125
Furthermore, there is an annual report that needs to be provided to Florida Due May 1st. Florida has a cost of $150 to submit this report.
For single-member LLCs, you could utilize a service Legal Zoom. Not a good idea for multi-member LLCs.
Even for a single-member LLC, it may make sense to use an attorney if you never owned an LLC before. As an attorney, it doesn't take me too long to create the operating agreement and do the filings. Most of my time is spent on answering various questions from the client relating to the LLC and what they intend to do with the LLC. My goal is to make sure the client has everything he or she needs to start their journey. That's a slightly different scope of work than just forming an LLC and washing my hands.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
It’s okay to use legal zoom starting out but as your business becomes sophisticated and more general partner join, you’ll have to upgrade to a lawyer.
As a general rule, your first step shouldn't necessarily be creating an LLC, it should be finding a deal. One deal probably isn't enough to necessitate an LLC unless it's a large commercial holding. Also, LLCs are pass-through entities, so they do not provide tax benefits.
LLc provides tax benefits, I believe your statement is incorrect.
The pass through concept just means the income flows through my personal tax statement after deductions and loss have been taken out on the corporation.
There are huge tax benefits associated with management of the property through real estate such as :
Mileage tax deduction
Depreciation tax deduction
Startup tax deductions
Capex tax deductions
Repairs tax deductions
Reporting of loss
@Jonathan Pechmajou you are entitled to these deductions regardless of an LLC with rental properties:
Mileage tax deduction/Depreciation tax deduction//Capex tax deductions/Repairs tax deductions/Reporting of loss. Startup tax deductions- (I am not really sure what you refer to with this one) but if these are business expenses you are also entitled to them without an LLC.
You can deduct in the year you put the property into service.
You don't need an LLC to get the deductions. You should nonetheless maintain separate bank accounts, and treat it like a separate business.
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