Long Distance investing with an LLC?

[Michael Clark]

I hit a snag recently. I consulted a local attorney in California for an LLC in Michigan. He declined to file after wasting a week's time. I've been told by conventional lenders that I need two years of steady work experience which is the end of this year. What should my next step be?

[Suzie Remilien]

@Michael Clark I'm not to clear on the connection between the employment history and the LLC, but I can speak on the work experience part. If you can document two years employment history, you should be able to apply for a loan on an investment property by January. You would just need to show one month paystubs and two year W2s from your employer if dealing with a conventional lender. If self-employed, two-year tax returns are typically required. Hope that helps!

[Lisa T.]

You can contact Corporate Direct. They can set up an LLC for you in most states. It's all done online. There are other companies that do this but we've used CD in several states. One of the things we learned which wasn't obvious when we started is that in the long run you can save money if you set up a "holding" LLC in Wyoming FIRST and then have that LLC own any other LLCs. [You can google and find more information about the benefits of having a holding/master LLC in Nevada, Wyoming, etc.) It's an asset protection strategy. You always want those state-specific LLCs organized in the same state as that physical property so it's not considered a "foreign" LLC which incurs extra reporting requirements. In addition, you can save money because you only file a tax return for your WY holding LLC. If you hire a CPA that specializes in real estate (highly recommend!) that single return will also include any necessary state filings for the property. One of the keys to successfully owning real estate in another area of the country is knowing where to put your hard-earned money. A good tax person makes a difference. We found a good one and they charge a flat fee per return but maybe more important they are current on all the real estate rules and have saved us a lot of money over our last CPA.

[Basit Siddiqi]

getting an LLC is quick and takes only a few hours. I am surprised that they took a week to say they couldn't do it.