Two states investments
Investor · Member since 2021 · 9 posts · 6 votes
Two states investments
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3yQuote from @Bar Shalom Laniado:
Hey,
I am a Wisconsin investor and I consider start investing in TX.
I have LLC in Wisconsin. Could you please advice regarding the following:
1. Can I use the Wisconsin LLC to hold my TX properties?
2. Should I do it? Are there advantages to open a new LLC?
Note: I may practice in wholesale deals in both markets
Thanks!
Yes you can do it, you just need to register the company as a foreign entity. you should talk to your CPA about opening a new business versus keeping it as it relates to taxes and if there are any benefits for having 2 versus 1.
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29 Replies
- Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes3y
Quote from @Peter Walther:
Quote from @Greg H.:
It occurred to me a title underwriter would probably authorize the issuance of a policy if it contained an exception that read something like:
Loss or damage occasioned by the failure of ABC a WY LLC to properly register in the State of Texas.
So I mentioned earlier in this thread(maybe not to you) that it has never been an exception to the title policy nor would I expect any lender on a sale from me would except that language
So I mention again I have done it this way many mant times with many different title companies. All as with any sale required my formation docs as well as operating agreement and the only time it was an issue was in North Dakota and as I recall it was on the buy side.
Yes I ran this by a Texas attorney who also owns a Title Company in Texas a decade or so ago as well as a Louisiana Attorney who opinion was it was acceptable not to register although I gave up my right to bring suit which was not important to me
- Specialist · Winter Springs, FL · Member since 2009 · 1k+ posts · 747 votes3y
Quote from @Greg H.:
Quote from @Peter Walther:
Quote from @Greg H.:
It occurred to me a title underwriter would probably authorize the issuance of a policy if it contained an exception that read something like:
Loss or damage occasioned by the failure of ABC a WY LLC to properly register in the State of Texas.
So I mentioned earlier in this thread(maybe not to you) that it has never been an exception to the title policy nor would I expect any lender on a sale from me would except that language
So I mention again I have done it this way many mant times with many different title companies. All as with any sale required my formation docs as well as operating agreement and the only time it was an issue was in North Dakota and as I recall it was on the buy side.
Yes I ran this by a Texas attorney who also owns a Title Company in Texas a decade or so ago as well as a Louisiana Attorney who opinion was it was acceptable not to register although I gave up my right to bring suit which was not important to me
I can't explain your experience but here is the underwriting guidance from First American Title to it's agents for situations similar to what we've been discussing. As I previously wrote, the guidance is the same as I found at the other five underwriters I worked at.
First American is either the largest or second largest title insurer by premium dollars in the US (it changes from year to year depending on how Fidelity National Title and its subsidiaries does).
Factors to be taken into consideration by title insurance examiners and underwriters in
connection with LLCs are the relevant state statute(s), the articles of organization and the
operating agreement of the LLC, and an analogy to partnership and corporation law. If an LLC is
the grantor or borrower, the title company must check the existence of the LLC, the authority of
the LLC to own and convey real estate, and the authority of the designated individual(s) to sign and deliver the conveyance or mortgage instrument and other related documents. The title insurer will customarily require the following:• A good standing certificate from the state of organization of the LLC (and, if the LLC is
purchasing or mortgaging property in another state, evidence of registration or qualification
to do business in the state where the property is located, if and to the extent required by that
state);
• If the conveyance is from an out-of-state LLC, a review of the law of the state of formation
for requirements with respect to organization, existence, and authority. Currently, all fifty
states and the District of Columbia have enacted LLC statutes that permit the qualification of
foreign LLCs. Failure to so qualify may render any purported conveyance or mortgage by the
foreign LLC invalid. The laws of both states must be checked to determine the classification
and treatment of the LLC and its members. If an LLC is conveying, purchasing or mortgaging
property in another state, the state where the property is located will recognize limited
liability of the members and the existence of the foreign LLC entity;
My note: Since even the Texas Sec of State will not opine on whether a foreign LLC's actions constitute transacting business, I believe no title underwriter will take it upon themselves to make that determination and will therefore either require registration or take the exception in the policy. If you'd share the attorney's opinion letter you received, I'd love to read it. - 3yRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
- 3yRonald RohdePro MemberAttorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
Quote from @Bar Shalom Laniado:
Hey,
I am a Wisconsin investor and I consider start investing in TX.
I have LLC in Wisconsin. Could you please advice regarding the following:
1. Can I use the Wisconsin LLC to hold my TX properties?
2. Should I do it? Are there advantages to open a new LLC?
Note: I may practice in wholesale deals in both markets
Thanks!
Yes, you can.
No, you should not (or register foreign) How will you evict? Cannot be a plaintiff in anything, how will you get notice of lawsuits? (no registered agent, no presence in TX)
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