Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
While I know this is wildly different across states and formation types and the like but...anyone have any sort of guidelines on what an attorney should cost for setting up an LLC? I'm focused on Delaware, but I imagine anything in the Northern Maryland, South Jersey, Philadelphia areas should be comparable.
I'm only just getting started and will not let the lack of an LLC hold me back from doing so. I can always transfer property ownership later (without fear of triggering any due on sale clauses because I've already cleared it with my lender and they're willing to put in writing before I go to closing).
However I'd kind of like to have the LLC set up so that I can start my branding and marketing and know that I have the legal rights to the business name and the like. Perhaps a conversation on business name and marketing before having an LLC belongs in another post though...so we'll see where this conversation goes and maybe I'll post that up there.
Investor · Hammonton, NJ · Member since 2015 · 58 posts · 17 votes
11y
Hi, @James MasottiI have setup LLCs several times through New Jersey's state website. It's relatively easy and painless (at least in New Jersey) to do it all online, and then get an EIN. As for the Operating Agreement, I have several that I've paid for from attorneys, but after finding Rocket Lawyer, I use it for many of my legal documents. They have state specific legal forms ready to go, and an easy to use questionnaire to help you fill it out as you go. I just logged in to check, an they have an LLC Operating Agreement, and all kinds of other documents that help real estate investors (such as Lease Agreements, Eviction Notices, etc). I highly recommend them, they've been well worth the money for me versus taking all my work to a lawyer.
Rental Property Investor · Joliet, IL · Member since 2013 · 102 posts · 48 votes
11y
hi James,
My LLC is in Illinois. The State fee for an IL LLC in $500. Our attorney quoted another $500 to $1000 to develop the articles of organization and complete the other documentation. Several people suggested I did not need an attorney and could file the paperwork myself. I'm a bit on the conservative side so going it alone felt risky. It seemed a little short sighted to setup an LLC to protect my assets yet not be willing to pay a small fee to have a professional involved to ensure the LLC was established correctly. I finally decided to complete the documentation myself and then had our attorney review it prior to submitting.
I completely agree. I'm just trying to get a feel for thing because I was told by one attorney that someone recommended that there was an initial $295 consult fee. And then if I decided to move forward with using them there would be the actual payment for services provided.
I don't mind spending the money up front to make sure it gets done correctly, but like most investors I want to make sure I'm paying the appropriate fee to do so.
Investor · Charlotte, NC · Member since 2015 · 66 posts · 21 votes
11y
In N.C the state fee is $125, and I did it myself. I plan on having several LLCs. So paying thousands of dollars for the creation of each LLC just wouldn't work for me.
I agree paying thousands wouldn't make sense. Having them set up the initial one so that they can advise on an ideal structure given my strategy though would give me the information I need to possible move forward doing it myself in the future.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
11y
Hi @James Masotti. I paid my attorney $500 for a strong operating agreement semi-tailored to what I am trying to do. The Op Agreement is huge. The title co's and lenders will look at your formation docs when you buy and borrow. Smart to set it up correctly and ask others what their fee experience was!
Investor · Charlotte, NC · Member since 2015 · 66 posts · 21 votes
11y
@James Masotti In NC setting up an LLC is simply answering a few questions. Try this, go to a site like legal zoom. Go through the process, answer all of the questions they ask. They will provide a summary before you purchase, for you to review. All of the questions and all of the possible answers will be listed.
I'm in no way affiliated or promoting that site or it's services.
Investor · Hammonton, NJ · Member since 2015 · 58 posts · 17 votes
11y
Hi, @James MasottiI have setup LLCs several times through New Jersey's state website. It's relatively easy and painless (at least in New Jersey) to do it all online, and then get an EIN. As for the Operating Agreement, I have several that I've paid for from attorneys, but after finding Rocket Lawyer, I use it for many of my legal documents. They have state specific legal forms ready to go, and an easy to use questionnaire to help you fill it out as you go. I just logged in to check, an they have an LLC Operating Agreement, and all kinds of other documents that help real estate investors (such as Lease Agreements, Eviction Notices, etc). I highly recommend them, they've been well worth the money for me versus taking all my work to a lawyer.
I completely agree. I'm just trying to get a feel for thing because I was told by one attorney that someone recommended that there was an initial $295 consult fee. And then if I decided to move forward with using them there would be the actual payment for services provided.
I don't mind spending the money up front to make sure it gets done correctly, but like most investors I want to make sure I'm paying the appropriate fee to do so.
Hi James,
I agere that getting your LLC going should be your first step.
llet me recomend that you reach out Bill Dolan at Dolan Law. He is a real estate investor friendly attorney that I met at a REI. I have since used him to set up my Delaware Series LLC and to create some contracts specifically for me. His email is
First, there was no consultation fee. We met at his Wilmington office, discussed options and moved forward. The series LLC for DE was about $860 all in but that included expediting fees charged by the state to assure the LLC was fully setup within two weeks.
I ultimately chose the series LLC because it allows me to separate each house or DBA into a separate series which has all of the advantages of creating a separate LLC just without all the paperwork and at a fraction of the cost.
Thanks for the awesome information. I didn't realize that about the series LLC. I'm not too worried about expediting even though I may be making an offer before the LLC is set up since I've confirmed with the bank that transferring title to the LLC will not trigger a due on sale clause.
I'll add Dolan to my list of folks to call tomorrow.
Kansas City, MO · Member since 2018 · 12 posts · 3 votes
7y
Has anyone here ever had their LLC challenged in court? I'm in the process of hiring an attorney for LLC advisement. I see its easy to set up an LLC online, just question the strength or if my operations would compromise the integrity of the LLC.
Has anyone here ever had their LLC challenged in court? I'm in the process of hiring an attorney for LLC advisement. I see its easy to set up an LLC online, just question the strength or if my operations would compromise the integrity of the LLC.
I haven't had mine challenged in court, so I can't directly speak to that, however the guidance on this that I have received is that the reason they are challenged in court is because people don't treat them like a business.
You should have a separate bank account for your company.
You should have separate lines of credit (credit cards) for your company
You should have all properties titled to the company.
You should have commercial loans in the company's name.
You should have insurance in the company name.
You should NEVER co-mingle personal and business expenses. If you do, accidentally, than you need to make sure you do the appropriate financial transactions to log the expenses as owner contributions or disbursements.
If you talk to a CPA or attorney they may disagree with some of these above points, however I view it like this. If you're "investing" and want to own the properties in your personal name to take advantage of fixed rate 30 year mortgages, than just get an umbrella policy to cover your additional exposure.
If you want to create and scale a business, than set up an LLC (or other entity structure appropriate to your business model) and then actually run it like a business and don't cut corners. Make sure your CPA signs off on anything you're doing to "save" money or time that involves using your personal name...sometimes it's not impossible to do, but you need to have the correct form of documentation to support this if you get called to court or challenged by the IRS.
Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
7y
As other explained above, it is really easy to register an LLC and you can do it yourself or with the use of one of the online registered agent service. A registered agent can cost you as cheap as between $35 and $75 per year depending on the state. The initial filing fee also varies between state (an average of $150).
However, where you want to have a lawyer involved if for the drafting of your operating agreement. The standard generic templates that are provided by some state or online services are ... standard and generic.
You want an asset protection, real estate oriented operating agreement. That is what will protect you. As each situation is different, yours should be taylored made for you and your specific needs.
@Mike S. When you did your own LLC, did you use your personal address or a UPS Mailbox?
Most of my companies are either at USPS PO box with street address or virtual office for the members if needed. However all of them use the registered agent address for filing as address of business as you can't use a po box with most state.
Wallingford, CT · Member since 2017 · 11 posts · 3 votes
7y
I just met with a local attorney here in CT that I was thinking of working with and he did not charge any consult fee. Run from any attorney who does that... In CT $120 is the State Filing Fee and this attorney would charge me $200 to complete the docs to form the LLC.
@Mike S. Okay, so I can modify the information once it's registered? I didn't use my home address.
The registration usually contains the place of business of the LLC, the address of the registered agent, the name and address of the manager and/or members.
You can always amend the information either during the yearly renewal or by paying an supplemental filing. However, all the prior registrations will be available forever for all to see.