Starting an LLC - who you gonna call?

17 Replies

I have heard it is best to purchase properties through an LLC. Some quick searching suggests setting this up in Wyoming or Nevada is a good idea. Is this true and if so, who are good folks to call in order to get started?

@Scott Garrels so not everyone agrees with the results of your "quick searching" in that it's not always "best" to purchase properties through an LLC. Financing in LLCs is a challenge. I would suggest you do some more learning on the topic. There are probably over 10,000 posts on the topic on this site alone. Once you dig in a bit you can see which folks follow your line of thinking. As you build connections you will get an answer to your question FOR YOU.

@Bill S. Thank you for this reply.

I know that I said quick search and so I did suspect I would need to dig a bit deeper. I really appreciate your guidance here and will continue to reach out and make more connections.

Thanks so much once again.

I am taking a RE course right now and the topic of starting a LLC is covered but I cannot share that info here. He also discussed the importance of buying the houses under the LLC. And of course, seeking an advise of an attorney is always the best way to go about,

Originally posted by @Emeline Faaumu-Niutei :

I am taking a RE course right now and the topic of starting a LLC is covered but I cannot share that info here. He also discussed the importance of buying the houses under the LLC. And of course, seeking an advise of an attorney is always the best way to go about,

Thank you for your reply here as well.  I would love to find out more about the course you are taking and if you feel there is value in attending something similar in my area.  I know that seeking more insight will be part of this specific task and identifying a good attorney is always key.  I will reach out and see if you have any more to share.  

Thanks again,

Scott

@Scott Garrels if you just need to create the LLC and do not need the legal advice or operating agreements drawn up, there are literally hundreds of places who create them for you cheaply, and they serve as your registered agent as well. I mean cheap like $50 or $100, over the filing fees.

Originally posted by @Jerry W. .:

@Scott Garrels if you just need to create the LLC and do not need the legal advice or operating agreements drawn up, there are literally hundreds of places who create them for you cheaply, and they serve as your registered agent as well. I mean cheap like $50 or $100, over the filing fees.

@Jerry W, thank you for your reply.  It is very helpful to better understand some of the options out there for this type of service.  I will certainly look more into this one to save all the $$ I can.

Wyoming is the best choice for the state to do an LLC or Corporation in but you will still need to do a Foreign Entity registration in your state.

I do recommend using one of the services as your Registered Agent. You can also set up a virtual office, mail forwarding, phone and even have your incoming communications go through an Attorney so you have attorney client privilege. 

But again talk to a CPA and/or attorney. 

My LLCs are set up in the same two States in which we have properties. One lawyer set them up in TX, and another lawyer set up our FL LLC in FL. We have used a portfolio lender for financing.

@Scott Garrels

My understanding is that it resembles an org chart. The services entities are separate from the properties which are managed by holding company. The holding and service companies are owned by the master LLC.

Finance pays all of the bills. collects rents etc.

GC manages repairs and maintenance.

He has a property management company. 

Holding Company

Main LLC.

@Kerry Baird Thank you for your reply here.  So does this set up provide specific benefits simply because of where your properties are located OR does it bring in others as well?  I know it may seem elementary to you perhaps, but I am wondering why you could not set up one in TX and hold both TX and FL properties there for example?

@Nate Marshall Thanks again Nate, this is really good insight.

So this set up has the functional groups separated out to isolate each into their own LLC. I assume this provides limited risk for each area somehow, correct? 5 total LLCs based upon this structure, if I understand correctly.

@Scott Garrels  

Reduced liability from one property to the next. If someone slips and falls at property 38 it doesn't affect the others. He also runs maintenance from his GC and Maintenance company, billing and purchasing from his financial services company and coordinates Property Management and leasing from that entity. The holding company owns the properties. 

@Nate Marshall Thanks again for the insights here that you have provided.  I do get how this structure provides the benefits you describe here.  It also makes sense for me to organize the various companies in this manner.  I come from an aviation company background and they utilize a similar structure for the various businesses they have as well.

Happy Labor Day to you!