New to Real Estate · DALLAS TX · Member since 2021 · 24 posts · 10 votes
I need help in setting up an LLC for my real estate business. I do not want to own another home under my personal name but wants to use an LLC to own it. I am basing Dallas Fort Worth Texas. Any recommendation will be greatly appreciate it. Thank you
I set up 5 LLC's last year and cancelled all 5 of them after giving them a little thought. The subject of LLC's comes up about once a week on BP and my story is always the same old thing. There are too many myths that LLC's protect your personal assets. They don't protect you one bit. If a balcony breaks at one of your properties, someone crashes to the ground and dies then their heirs will sue your LLC for that property. Then, when your insurance for that property doesn't cover the $5 million you lost in court the heirs are going after your personal assets (ownership) in every one of your other LLC's and that is very simple to do.
So, the answer is; avoid all the costs for setting up multiple LLC's that require annual fees and purchase an Umbrella Insurance Policy for a few million dollars that covers every property you own. The additional insurance will most-likely cost less and take less annual work than multiple LLC's. Especially, when your accountant or CPA charges you extra for each LLC and then you have to pay the annual costs for each LLC. In California, the fee for each LLC is $800 per year and that can go toward an Umbrella Policy that gives you much better protection.
Rental Property Investor · Colorado Springs, CO · Member since 2020 · 433 posts · 284 votes
4y
We did our first llc by doing what others have suggested, just go to the state website. But we have used an attorney for others to do a better job of asset protection. Either way works…what is your goal in having the house under the llc? You may find that lenders are less willing to offer loans in the llc’ s name. Best of luck
Investor · Huntsville, AL · Member since 2021 · 41 posts · 15 votes
4y
We've done multiple on Rocket Lawyer. It's super easy there as well. I'd recommend going the Legal Zoom/Rocket Lawyer route for the beginner. They make it super simple for you.
Contact Prime Corporate Services- ask for Jen, tell her Solara sent you.
Sure, you can go and register an LLC with your state however having a financial advisor that knows what the heck they are doing could save you thousands if not hundreds of thousands later on. Trust me.
I need help in setting up an LLC for my real estate business. I do not want to own another home under my personal name but wants to use an LLC to own it. I am basing Dallas Fort Worth Texas. Any recommendation will be greatly appreciate it. Thank you
I stressed over this myself for a while. The best thing I did was hire a lawyer to do it. It wasnt that much. 500 I think. She probably lost money on me because I kept calling later asking "What about this or that?" She is great though and pats me on the head and tells me everything will be alright.
My point is this. Do what your good at and leave the rest to professionals. If you are good at law then by all means do that. If not, this is a no brainer. Get the lawyer. You will save so much money down the road.
Investor · San Diego, CA · Member since 2019 · 286 posts · 135 votes
4y
What state are the rentals located? TX? If so, set up your LLC in TX, and In order for your LLC to protect your assets, you need to maintain it. operating agreement, separate bank accounts, LLC should be on the lease, etc.
This is a great forum with very knowledgeable members that will help to guide you in the right direction.
The site has quite a few tools that can be helpful for new members. For example, if you are looking to connect with other members near you, want to learn from people in a specific area you’d like to invest in, or have a desire to find people interested in certain topics, you could use the search feature here: https://www.biggerpockets.com/search/users
I set up 5 LLC's last year and cancelled all 5 of them after giving them a little thought. The subject of LLC's comes up about once a week on BP and my story is always the same old thing. There are too many myths that LLC's protect your personal assets. They don't protect you one bit. If a balcony breaks at one of your properties, someone crashes to the ground and dies then their heirs will sue your LLC for that property. Then, when your insurance for that property doesn't cover the $5 million you lost in court the heirs are going after your personal assets (ownership) in every one of your other LLC's and that is very simple to do.
So, the answer is; avoid all the costs for setting up multiple LLC's that require annual fees and purchase an Umbrella Insurance Policy for a few million dollars that covers every property you own. The additional insurance will most-likely cost less and take less annual work than multiple LLC's. Especially, when your accountant or CPA charges you extra for each LLC and then you have to pay the annual costs for each LLC. In California, the fee for each LLC is $800 per year and that can go toward an Umbrella Policy that gives you much better protection.