I am trying to purchase a commercial property in Indiana and I was quoted $1500 to create an LLC and draft the purchase agreement. I know creating the LLC is very simple and inexpensive. Where is the best place for me to go to find the correct forms to use? Should I create the purchase agreement on my own? Is there someone that could create everything for me at a more reasonable price?
I found a few places I could purchase the forms online and it seems to be pretty simple. I currently own about 20 rental properties in the state, however, this would be my first commercial zoned property.
why do you nee LLC?
To protect my other assets.
Was it a lawyer who quoted that to you? If so, then that's probably appropriate. If it wasn't, I would have a lawyer or commercial real estate agent draft it....I wouldn't recommend doing it yourself unless you have past experience.
On both of my commercial properties the sellers realtor drafted the purchase agreement and there wasn't a charge (unless you count the seller's realtor fees).
Yes, It was a lawyer. Neither of us have a realtor in this deal.
I am thinking you don't have to have an LLC at all. Your insurance that you carry with an umbrella would be good enough. You don't have to have an LLC. I think someone is overly cautious.
If you are working with a CRE attorney that knows what they are doing, $1500 is a bargain for a custom PSA and organizing a LLC with operating agreement, resolutions, etc. That said, just sign the PSA in your name and include language allowing the PSA to be assigned to an affiliated entity controlled by you. If you get through due diligence and are actually going to close, you can setup the LLC closer to closing and assign the PSA.
I had an attorney consult on an entity structure and then had an operating agreement drafted along with state filing paperwork. The total was $1785 (I believe this may have included registered agent fees and address forwarding, and I need to review my invoice for if this covered state filing fees, but I think not).
Why did I have an attorney do it? Because I'm new to the game, and I'd rather have a professional draft up a 30 page operating agreement that covers many things beginners don't know about legally. Most of the state filling paperwork looked relatively straightforward, but the the actual agreement did not.
You could go the Legal Zoom route if you want a cheap LLC, but don't expect it to cover everything. If you just want to have a firm's paralegal draft/edit a templated operating agreement for you, that is something like $400 + state filing fees, which I will do next time.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing