Everyone has their own personal opinion on LLC's when starting out. I set out an LLC for my out of state rentals but have them under one. I paid $300. I'm not sure what your friend was paying for. Did he separate a portfolio of properties under individual LLC's?
Nothing wrong with getting Umbrella insurance though and not messing with it yet. Hope this helps!
@Allan Calderon That price mention to create and maintain an LLC is just bluntly a rip off. Your profile doesn't say where you are from so it is hard for anyone to say what it will cost. different sates charge different amounts.
In MD it is $75 to create one, which I can do myself while in about 20 minutes at the state office. It is then $300 a year to the state to maintain it every year. I hear CA is $1,000 a year to maintain.
There are also other costs. you will have the cost of accounting fees for your tax return, Bank charges and other miscellaneous charges of running a business.
There is also the cost of time. If you have multiple LLCs this can add up to being a real hassle.
Whether you should have one is a more complex question that depends on your specific situation.
@Allan Calderon I don't know the costs for Florida but someone here should.
I believe the fee for a DIY LLC formation in Florida is $160 and about $140/year for an annual filing. The fee you mentioned is very excessive. Now, whether or not an LLC is necessary in your case is probably a good conversation to have with an attorney.
I'm in the professional services world so I am biased, but I always recommend at least a consultation with a professional.
I have seen too many times where investors create multiple entities, not realizing the tax and filing implications. A few hundred bucks on the front end would end up saving thousands that it would take to clean up a potential mess.
Like any good lawyer answer, the answer is "it depends." Do you need one or multiple LLCs? How should they be taxed? Are you trying to raise outside capital? If yes, from friends and family, or arms-length third parties? Do you want anonymity features? Do you want to update your estate planning at the same time? Do you have particular buy-sell needs?
I'm not in your jurisdiction so I don't know what kind of prices to expect. If you want to get some perspective on what I charge my TX clients, I put my LLC costs on my website. TX has a large filing fee ($325 ish for expedited) so take that into account when looking at what I charge.