Struggling with decision to form an LLC

7 Replies

Hi everyone - I've read a lot of threads and articles on BP thus far concerning this topic but I haven't come away feeling all the more informed. I do want to talk to a professional(s) thought as a next step - that much I know. For those that wrestled with this question as they started out, would you be willing to provide the name of an attorney - ideally one based in Massachusetts (in case I want to sit down with the person)?

Thanks for any info you can offer!

Daniel,

Over here in Michigan we can file our own paperwork to form an LLC and the fee is $50. I run my company as an LLC and have for close to 15 years. I've done flips, rentals, new construction and even contract work at times. LLC's are very flexible as you can choose how you want to be treated tax wise.

The best advice I can give you is to interview multiple attorneys and CPAs until you find one that understands what you want to do. You shouldn't pay more than a few hundred max for an LLC with an operating agreement.

@Daniel Sciortino , you are right on about talking to an attorney and CPA about what you want to do.  Although, over emphasis on entity formation to protect assets that you don't yet own is a bit of a roadbloack.  Also, with all due respect to @Dylan Tanaka , MA is not MI, you should take MA advice from MA people.  LLCs in MA cost $500 to form (just the state fee) plus $500 per year.  Not $50.  And I've never heard of a MA attorney who charges less than an additional $500 for the operating agreement.  You can form the entity online yourself at Mass.gov for an extra $20 and then have the attorney draft the operating agreement.  So minimum is going to be about $1000 to start and possible more depending on how much consultation you want.

You can reach out to Alan Segal in Needham as an attorney, and my CPA is John Hyre in Ohio, you can google him.  Suggest you avoid the last few days of the month and the first few, as real estate attorneys are insanely busy at that time.  

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I started an S-Corp LLC for a non-real estate related business and I used LegalZoom. They have everything down to a science and I would recommend the idea of looking into it for sure. Different states are different, there's no doubt about that, but they've seen and done everything before and wouldn't have a problem helping you out.

I'm not an expert, but here's my understanding after just researching this very topic. You can form an LLC in any state, not just the one you reside in. So, if you live in MI, you can form your LLC in CA for example. Some states are better than others with regards to LLCs. The state is it formed in determines laws that will be used to resolve any complaints/law suits that may come up. Some states are more "LLC friendly" than others I hear, though I don't know how much this really matters. Another thing to note is that if you form your LLC in state "A" and then want to do business in state "B", you will probably have to foreign file in state "B" in order to do business in that state. The fee to foreign file is sometime less than the fee to form the LLC, but each state varies so check the costs and see which works best for you. Again, I am not an expert and I recommend contacting an attorney about the specifics in your situation.

Hi everyone - thanks for all that replied on this thread. Just as an FYI, the advice I've received thus far (from people I've spoken with) is to work with a attorney who is based in the state where I plan to file and to file the LLC in he state where I plan to buy the property (rational is that there would be lower fees in doing so). I'll update the post when I've had he discussion with someone more familiar with the local upstate NY market and familiar with real estate law in my target area. Thanks again to all