I live in Colorado and I see that I need a registered agent to form an LLC in Florida, do I need to use a service like Legal Zoom or Zen business to do that or can I do it on my own somehow?
Investor · NY · Member since 2016 · 7 posts · 1 vote
4y
Hello Randy,
Legal Zoom just assigns you to a generic Agent, you can just find one online for a couple bucks. Also, i am looking for my first investment property in the Saint Pete, Tampa Area.
Tampa, FL · Member since 2021 · 383 posts · 389 votes
4y
Forming an LLC on https://dos.myflorida.com/sunbiz is really easy. You can be the registered agent and the MGR for your company.
If you want further asset protection down the road, I would look into moving ownership into a land trust after closing. For that you can use an asset protection attorney. Land trusts do not violate the due on clause.
Property Manager · Tampa, FL · Member since 2022 · 147 posts · 66 votes
4y
There are cheaper services that can be your registered agent. I found Legal Zoom, IncFile and Zen very expensive. I have personally used Sunshine Corporate Filings LLC, they are based out of St. Petersburg! Also I believe if you have a CPA, some do offer that service as well.
Check out LLC University on YouTube. They have videos from most if not all state and offer videos insight on your Articles of Organization, Filing for an LLC, Annual Reports, etc.
I spent a long time learning from this page when I started my first LLC in another industry about 2 years ago, really good content. Like anything worth learning, you'll have to watch each video (sorted by specific states) a few times and read between the lines to understand some of the terminology.
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
4y
An LLC is useful for two things: anonymity and legal protection. In most cases, neither is warranted.
Warning: I am not an attorney and this can be a complicated topic. Please note the information provided below is a layman's definition designed to provide a basic understanding for the general audience. You should consult an attorney or CPA for your specific situation.
ANONYMITY: When you create the LLC, your name is recorded on the documents and published on the Secretary of State website for all to see. So you're not completely anonymous. If you want to be completely anonymous, you can use a Registered Agent. The Registered Agent will record the documents on your behalf so only their name and information appears on the documents. I've done this with my properties because I'm well known in my small town and don't want people to know what I own.
LEGAL PROTECTION: By placing your assets in an LLC, you are legally separating them from your personal assets. If someone injures themselves and sues, they will be suing the LLC and not you personally. If your insurance coverage isn't enough, they could seize the LLC assets, but not your personal assets.
Additional thoughts:
1. An LLC is not free. You can spend as little as $100 to form an LLC, or you could use an attorney and spend $1,000 or more. There are also additional costs of operating and maintaining an LLC, like separate bank accounts, annual report filings, tax filings, etc.
2. There are rules to follow! If you fail to follow the rules, you may open your personal assets to a lawsuit. An example of this would be mixing your personal money and LLC money in the same bank account.
3. You do not need a separate LLC for each property or a series LLC! Don't make your life more complicated than it has to be. Most professionals will recommend a separate LLC for every $1 million in assets but I don't think that's necessary. In my case, I have residential rentals in one LLC, commercial properties in another, self storage in a third, and my real estate company operates in a fourth. Some have more than $1 million in equity while others have less.
4. The need for an LLC is grossly exaggerated on BiggerPockets and other websites. Have you ever heard of a Landlord being sued by a Tenant and losing property? I've been on this board since 2010 and haven't found an example yet. You've probably heard of big Landlords losing property, but only because they were flagrantly violating Fair Housing, running a slum, or otherwise violating the law in an egregious manner. You are more likely to be struck by lightning twice. The vast majority of lawsuits against Landlords are for wrongful eviction, security deposit disputes, and Fair Housing Violations. Your basic insurance policy with $300,000 in liability coverage should be sufficient in 99.999% of all lawsuits.
5. The best protection for you and your investments? Know and obey the law. I manage around 400 rentals with 12 years experience and have never been sued once. Even if I were sued, I document everything and obey the law, so I won't be found guilty. Even if I were found guilty, the cost would be in the thousands, not in the millions. Insurance would cover it, I would pay the deductible, and no assets would be lost.
If you are in an area like San Diego where people are more likely to sue, a judge is more likely to find you guilty, and the payout is likely to be higher, then you may consider an umbrella insurance policy. This policy will provide additional coverage above what your existing policy covers. It's easy to obtain, costs very little, and doesn't require additional, on-going effort to maintain.
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