Hello Everyone, trust this note finds you in good spirits and closing out a healthy happy 2017.
Can anyone suggest a good RE attorney in Sacramento who can help w/ the following and navigate these questions cost effectively as it's just a few owners on a ~500k property (hence high legal costs hard to justify vs. turnkey solution a la LegalZoom? )
- LLC formation for single property best way to protect personal assets of individual owners?
- Cali vs Nevada/out-of-state LLC (read that if LLC's primary business is in California w/ which a property fairly obvious it is) then must hold in Cali LLC?
- Drafting an Operating Agreement between equity holders to address the big future questions/forks in the road
- Method to Holding Title (Joint Tenancy vs. Tenant-in-Common) vis a vis issues like Right of Survivorship and our differing equity shares of individual owners
Any other thoughts/suggestions are greatly appreciated!
Thanks in advance and enjoy your Holidays/New Year!
Hey Ali, you'll have to verify this info as I'm not an experienced investor but I don't believe you need an LLC in the same state as your property.
A while back I listened to Michael Blanks Apartment podcast #53 regarding asset protection and wrote down the following notes:
"Recommend using a Delaware, Wyoming, or Nevada LLC (they do not disclose who owns the LLC)
Delaware has the most experience in litigation b/c most of the major companies have delaware llcs, wyoming has been around the longest and has the most extensive history."
"but I don't believe you need an LLC in the same state as your property."
My CPA advises against this in California. If you do all your business in California, but the state sees you're registered in a different state, they'll can go after you for tax evasion. (California charges a high minimum tax on LLCs, which is the reason people would like to go to another state in the first place)
@Derek Daun - Thanks! confirming why I was thinking going w/ Cali is best. Hear Cali's formation takes long (waiting time from state i.e. 3-6 months?)
also Derek - any attorney recommendation? did you use LegalZoom or a lawyer to draft your Articles of Incorporation, create the LLC, etc.?
I actually don't use LLCs on my properties, so I can't help you there.
I have a attorney qualified to assist. You are welcome to pm me
Everyone's situation is different. However, we had to form an LLC for our properties and business. Talk to a qualified CPA. Our LLC in Ca took a few weeks, but we don't have to worry about taxes (what @Derek Daun mentioned is true), nor do we have to worry about liability.
You will need to get a California LLC to purchase property in California legally. It's just the cost of doing business here in this great state.
Give my broker/attorney a call. He deals with this all the time.
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