All Forum Posts by: Jay P.

I wish I had read this thread three years ago. I have invested in Grocapitus' project in Texas and it has been three years now. They couldn't get a construction loan and were constantly blaming the cities being tough on their permit process. After three years, they have put a pause on the construction for another year stating that the labor costs are too high now. I don't know if they will ever start construction and if they do how long will my money be locked with them.

At this point, I would recommend to stay away from them until they can show some results with new constructions.

In the meantime, I had invested in another syndication in the same time frame in the same Texas market. They have completed construction and 90% of the units are leased up. A payout of 8% has already been made and they have an exit plan in the works.

So, there is no reason why Grocapitus was not able to get going other than their incompetence.

Thank you all for your inputs. It is clear that being a resident of CA, there isn't too much of an advantage in setting up an LLC outside of CA.

I reached out the syndicator as suggested and they quickly obliged to our request to invest individually. I'm going to invest as a LP directly into the syndicator's LLC.

Thanks @aj singh. In that case, what is the incentive to set up an out of state LLC? Isn't it better to have a CA LLC if you are going to pay the fee anyway?

Thanks @Jon Schwartz. Yes, we are forming the LLC so that we invest as a single entity to meet the minimum requirement. As you said, we are asking the syndicator if we can invest individually even though the amount is less than the minimum. In case, that option doesn't exist, we would have to setup the LLC right?

Allen, Anderson advisors was one of the lawyers I consulted with.

I'm a resident of CA and I plan to invest in a syndication in Texas along with a friend of mine. I talked to a few lawyers and the recommendation was to create an LLC in WY with both of us as members and invest in the syndication through the LLC. A few questions though.

1. Once I register the LLC, how do I get a WY address to create a business bank account? Neither of us reside in WY or TX.

2. It seems like I would still have to pay the $800 annual fee to CA for the LLC as long as I reside in CA even if the LLC is incorporated out of state and holds investments outside CA. Is there a way to circumvent this?

3. I'm told the syndication would generate a K1 for our LLC and then the LLC would have to generate two separate K1s for each of the members. Is this a straightforward process?

Thanks,

Jay

Thanks Lance. Can I use choose my living trust to be the member when setting up the LLC?

My friend and I have committed to investing in a multifamily deal in Texas and we are thinking of creating an LLC with both us being the managing members. I would like to know if the membership has to be in my name or can my revocable trust be a member? The reason being, I'm not sure how will the assets be handled in the LLC if I'm no longer there.

Of the three options, which ones are possible and recommended to be the members.

Individual (me) - Individual (friend)

Trust (me) - Individual (friend)

Trust (me) - Trust (friend)

Thanks.