I recommend that you contact your local real estate investors association for recommendations. www.GAREIA.com is a good place to find companies that establish LLCs and obtain EINs. Send me a private message for recommendations.
I would start at the Georgia Secretary of State’s website. You are able to fill out the paperwork for both an EIN and LLC yourself.
Listen to @al and @chase.. i did the process myself and have property in my company name as we speak. I did the filing myself.
I would do it myself as the process is pretty straightforward
Step 1: Navigate to https://ecorp.sos.ga.gov/
Step 2: Select online services
Step 3: Select create or register business
Step 4: Follow the prompts on the online form
Step 5: Make a payment
Step 6: Apply for EIN https://www.irs.gov/businesses/small-businesses-se...
For Operating Agreement depending on the number of individuals and complication you can hire a professional to draw up the contract.
Cost Range: $100 - $300 (same day)
Hope the above helps!
Wow! I didn’t realize so many people created their own LLCs. I read this book, “The RE Investors Guide to Corporations, LCCs, and Asset Protection Entities” by Richard T. Williamson, and it had recommended that an attorney set one up.... definitely have some more research to do. Thanks so much everyone for the recommendations. It’s been greatly appreciated. If anyone else has anything to add to the thread, I’m constantly checking.
Hi folks, I'm a buy and hold guy, a few rentals being self managed. Have an S corp multi member LLC formed to be our Property Management entity, a multimember LLC as a pass through that is the owning / controling entity for our rentals that are all in trusts that I've gotten pretty good at writing, editing the new warrantee deed etc and having a local attorney file for around $50 each (just the filling fee plus a bit). I'm also a leader/mentor in my local REIA.
I've worked with trial attorneys, done deeper than most study into the quest to use LLCs to isolate risk... Comments:
- the commonly formed single member LLC even if created by an attorney who's main benefits are: gives you a correctly written operating agreement AND importantly the registered agent being an attorney. Most don't realize that to a plaintif's attorney the defendant's LLC (you) being self created and you being the registered agent means amateur and the LLC will be blown up with no effort at all. Then there's the generic operating agreement lacking many of the important clauses that you need.
- The multi-member LLC, you and your wife (etc) where each are 50/50, not some weak sham of 99%/1% attempt at charging order protection (you've lost the suit and what you have to pay is called a charging order) protection is best in a 50/50 multimember where the sued member (the property manager) is protected by the other voting member voting NO don't pay that charging order. YOu need a propertly written operating agreement, you not co-mingle funds between the business checkiing acount and personal purposes (ever buy something for yourself with the business account;;;; poof that LLC is now easy to blow up). No annual minutes, signed and filed? Poof! Many other ways your LLC is not worth much, or as much as you think.
What's the solution? Well #1 you need to be in a group of locals who are experienced. As Bill above mentions the experienced folks are in REIAs, face to face, google groups of sharing contractors etc.
Use an attorney to form your LLCs. Lately I'm now using Legal Shield for $145 per LLC, the REIA I'm a member has a discounted cost. At this price its foolish to roll your own. Just my view.
Consider the costs to have a well known attorney as the registered agent as just another one time insurance policy payment. Most don't realize that the operating agreement doc is the "heart" of the LLC and a generic doc is almost useless re liability protection and the many other functions of running an LLC (a business).
Admittedly the multi member LLC needs a partnership IRS return per year. But this filing is simpler than you might think. I use turbo-tax.
=== after saying all that...
For new folks forming an LLC is the last thing you need to be working on. Build your rental portfolio first. I had around 15 rentals or so in our personal names some with mortgages (which won't let you close into an LLC) before I moved all into trusts and beneficial interests being the pass through multi member LLC. Why didn't I worry? Because:
- #1 have good liability insurance. $1M liability per house is good. American Family offers $2M standard. Cost is about the same.
- #2 liability protection is: fix the house safe! Screen for nice / sane tenants. IE rough area rentals, nutty / crazy tenants are the largest source of possible suits. Buy nicer houses, screen for good tenants!
- #3 Be a good guy, nice landlord to your tenants. Folks don't sue folks they like. Genuine accidents that need coverage, now you have good insurance. Trial attorneys 99.9999% stop at the limits of insurance because that is easiest.
So much of this LLC for liability protection is both a mirage (doesn't really work that effectively if suied) and a guru pitch to be paid for some training. BUT I agree that entities for proper IRS tax regs is a real issue and great reasons to use S corps and multi member pass throughs to have rental houses show up on K-1's instead of Schedule E's (higher audit risk down on your 1040 / sched E's vs keeping rentals up in the partnership return....)
Best of luck.
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