Forming An LLC?

12 Replies

Hi

I was wondering when dealing with real estate is it require to have an LLC? or is it just better to have one? If so I was wondering what website would you people recommend to form an LLC online? I'm planning to make an LLC but not sure which site to use. Let me know.

Thanks

Hey Fizz!

You want to create a LLC, S Corporation, C Corporation, etc for one main reason (in my opinion) and that is it (the corporation) is considered a separate entity and thus, heaven forbid, you get sued. ..the IRS (in most cases) can't come after your personal assets (the Lamborghini, the house and/or your money in the bank). . .this is key.

Other perks include taxes, credit lines, etc.

As for a good website to get your legal game tight. . .try http://www.legalzoom.com

Honestly speaking, creating a corp is not that hard to do and if you do it yourself, it is cheaper. But that is only my opinion.

Hope that helps

Happy Investing!

Thanks Alot in your opinion which one should I get economy, standard or express gold? What's the difference between them? I just want to form an LLC but I don't know if i need all these extra stuff? Let me know which package you think I should get. Also if I want to do it myself where do I go to get all the papers/form to fill out and what do I need? Not sure if you understand it or anything because yea I don't want to spend that much for forming an LLC. Thanks Alot

Originally posted by "fizzlemahoe":
Thanks Alot in your opinion which one should I get economy, standard or express gold? What's the difference between them? I just want to form an LLC but I don't know if i need all these extra stuff? Let me know which package you think I should get. Also if I want to do it myself where do I go to get all the papers/form to fill out and what do I need? Not sure if you understand it or anything because yea I don't want to spend that much for forming an LLC. Thanks Alot

I've used LegalZoom to incorporate in the past (resources can be found at http://www.biggerpockets.com/legal-services.html ), and will be using them again today to incorporate another venture. If you plan on using them, please use one of the links included on the page I just mentioned (it is an affiliate link and we get a small cut).

BTW - I only recommend them because I have used them and their customer service is great! You can call them and ask them any questions about the process. They will help you out with no problems.

Thanks and good luck.

fizzle,

it sounds a bit like you're just getting started. if that's the case, maybe you should worry about a deal or two before you focus on your legal entity. i've only rehabbed one house, but i remember spending quite a bit of time worrying about taxes and legal entities. finally, i said screw it, and knocked out my first house. i still have a full-time job, so a few rehabs shouldn't affect me too much for tax purposes... before i do my next rehab, i'm going to get with a good re cpa, and get strucutring advice from him.
after you're first deal, it gets a lot easier. the hardest part is getting off your ***.

-dean

"... and will be using them again today to incorporate another venture."

Okay, Biggerpro & drweltman...

Just so I'm clear as well, each rehab, flip, assignment, or whatever your investment project is at the moment, needs to be incorporated (or LLC'd)?

qclemons,

i don't really know. there are posts on here that go in some detail about the best entities for rehabs or rentals. if i remember, most people said s-corps for rentals, and llc's for rehabs.
all i'm saying, is that i've only done 1 rehab, but it doesn't seem to me like a business entity is a priority if you haven't done any investing yet. get your feet wet, figure out your niche, and then, with some good advice from a professional (cpa, re attorney), get your legal entities started. a lot of people on here, with way more experience, have gone both ways on this. so, since i was so hung up on it, i just skipped it and bought a house and rehabbed it. learned a lot. lots of mistakes, but far from a failure. i wasn't affected by not having a business set-up. could something catastrophic happen that would make me wish i'd done it? maybe... will i need one in the future? yes. do people run businesses for years without setting anything up (basically, a sole propietorship)? sure they do. do i really know enough about this to be giving you advice? not really.
best of luck. get out there and get the first one done.

-dean

p.s. btw, what part of dallas are you looking into, and what are you trying to specialize in?

yes. do people run businesses for years without setting anything up (basically, a sole propietorship)? sure they do. do i really know enough about this to be giving you advice? not really.

drweltman you're too funny!!! :lol: But you've basically covered the answer to my question. I was under the impression that a person wouldn't be compensated by the title company or something if a business entity hadn't been established. I didn't want to get to the table at closing and hit a brick wall.

I'm basically starting out by assigning contracts until I'm more confident as an investor and learn more about the business. Ultimately, my goal is to graduate to rehabbing. Once I feel confident to start some rehabbing projects, I plan to focus particularly on southwest Dallas (i.e. Grand Prairie, Arlington, Duncanville, Cedar Hill, Desoto, Lancaster). Some areas of central Dallas have been appealing as well.

qclemons,

if i were you i would join the local re club (dfwrein, which you can conveniently find at dfwrein.com -how nice). i haven't been to their meetings, but i've heard good things from a buddy i met on here. i do check their discussion boards, which aren't as good as the one here, but they are specific to the dfw area. you should go network, and take as many of their classes as possible. good luck. keep in touch and let me know how it's going for you.

-dean

Thanks drweltman. I will be joining DFWREIN. I've already received my application packet and a list of meeting times. I intend to join next month and yes, based on conversations with the coordinators with the club, they've got a REALLY good organization that really fosters a learning environment and supports investors. I can't wait to join because I know that will be exactly what I need to really get my investment projects off the ground. They have a monthly event referred to as a "field trip" where they take members (especially new investors) out to actual rehab jobs and its a day long experience that investors are exposed to the step-by-step processes of rehabbing a property and also what happens during the contractual phase and closing issues. I'm excited about that because I've never heard of a group going to this length to educate newbies to be as successful as they can be in this business.

Keep in touch drweltman and if I come across ANY interesting deals around Dallas, I'll contact you and perhaps we can throw business to one another from time to time. I've added your username to my list of contacts!! :D (what's your investment niche, by the way?) Thanks for all your help and advice.

qclemons,

sounds good. i'm primarily looking for rehabs, and in the future i'd like to add the occasional good rental to my portfolio. right now i'm looking for quicker cash profits. i'm trying to stick to the carrollton/the colony/north north dallas area. eventually, i'd like to try a little of everything, as long as my core business is solid.
i'm planning on joining dfwrein as soon as i get back to dallas, later this year (hopefully).
a cool little tool you'll have fun playing with: go to the dallasnews.com site; go to business tab; maybe under the re tab... oh hell, i'll send the link to you in a pm. anyways, it's a map of dfw, broken into ntreis areas, and you click on an area and it tells you changes in sales prices, number of homes sold, days on market, etc. it's also color coded, so you get kind of a bird's-eye view of GENERAL trends in the dfw area. remember, it is an overall trend for an area. within that area there will be many smaller areas going up and down. you really need to get to know those areas. when i'm refreshing my knowledge of an area, i like to get my realtor to send me the comps, and i look at that while i drive around and put a face on the area. anyways, my hootch mate is getting the cofee going.

-dean