LLC - many questions, please help!

[Zach Howard]

I think it's probably better to hold real estate in an LLC than in my personal name. Reason being is that I'm not a US citizen and I do not live in the US.

I have so many questions though.

1) Can anyone tell me more about series LLC and whether it's necessary to hold each property in a separate LLC

2) What are your thoughts on a trust, rather than an LLC - advantages, disadvantages etc?

3) Any specific states you recommend to set up any of these (Not sure where I'll be purchasing property yet, maybe Detroit, maybe Cleavland, maybe Augusta, maybe Des Moines, maybe Saint Cloud, maybe Memphis...)

4) I already have a LLC based in Hong Kong (We call them limited companies, but the principle is the same). Can I use this to purchase and hold US-based real estate?

Any other advice, or pieces that you think I'm missing - I'd be grateful for any and all wisdom that is shared with me. 

Thanks. 

[Savannah Wallace]

Hi Zach, 

1. A Series LLC can be a useful tool if you plan to invest in multiple properties within a single state that recognizes this structure. Essentially, a Series LLC allows you to create multiple "series" or cells under one master LLC, each with its own assets and liabilities. This means that if one property faces a lawsuit or debt, the other properties within different series are generally protected. However, not all states recognize Series LLCs, and even among those that do, the level of liability protection and privacy can vary. If a state doesn't offer series LLCs, or my client won't be holding multiple properties in that state, or it requires listing their names publicly as member/managers, I usually recommend that my clients form a separate LLC for each property. This approach provides clearer asset protection by isolating liabilities property by property and helps ensure that your personal assets remain shielded.

2. Trusts generally do not offer the same level of liability protection that LLCs provide. If you hold a property solely in a trust, you may still be personally exposed to lawsuits or creditor claims related to that property. LLCs, on the other hand, are designed to protect your personal assets by separating your ownership interests from the property’s liabilities. That said, trusts can be helpful in certain situations, such as when a property has a mortgage and you want to avoid triggering the lender’s “due on sale” clause while transferring ownership interests to your LLC.

3. When it comes to choosing a state to form your LLCs, the best practice is usually to form the LLC in the state where the property is physically located. This approach simplifies compliance with local laws and avoids the additional costs and paperwork associated with registering as a foreign LLC in that state. To add a layer of privacy and enhanced asset protection, I often recommend that the member of each property-specific LLC be a Wyoming LLC. Wyoming offers strong privacy protections, does not require public disclosure of members, and provides favorable charging order protections, which help shield your ownership interests from creditors. 

4. No, you will need to set up US-based entities for investment in the US.



Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.