To form an LLC during offer process?

[Ben C.]

Hello, I have a question regarding LLCs... My goal is form a new LLC for each project such a 519 Main Street llc etc for max asset protection... My question is each time you form an llc it will take some $. Do you form the llc when making the offer and if you don't get the property that $ is flushed down the toilet? Because I know if you go to switch deed after closing to an LLC that needs an attorney and more $ (don't want to do it this way). My only other concern is if you make An offer as an LLC might lower your chances of acquiring the property vs other individuals (for example if It's an estate sale and they would prefer the home not be demolished etc). Look forward to hearing the best way to approach this. Thank you!

[Jessica Zolotorofe]

I would go under contract in your name or the name of a general LLC you form that will be the sole member of all of the number-street name-LLCs. So, Investor LLC would be the sole member of all of uour property owner LLCs, which is actually beneficial for a number of other reasons, but the property specific LLCs will be considered disregarded entities for tax purposes, so you still only have one taxpayer to worry about. You have to make sure the contract contains a provision that allows you to assign. Your attorney should take care of that as part of the attorney review addendum. If the seller is strongly opposed to a general assignment clause, they should always be ok with no assignment except to an entity of which the original contract purchaser is the controlling or majority member. I would then form the property specific LLC right before you close, or at least after all of your contingencies are satisfied and then take title in the name of that LLC.