All Forum Posts by: Greg H.
Greg H. has started 51 posts and replied 4177 times.
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Quote from @Peter Walther:
Quote from @Greg H.:
Quote from @Michael Plaks:
Quote from @Greg H.:
Just to clarify, you are not Required to register as a foreign entity. One just gives up certain rights like the ability to bring a lawsuit if they do not. I have bought and sold in 25 states and the only state that absolutely required it was North Dakota
You ARE required to register by Texas law:
https://www.sos.state.tx.us/co...
https://www.sos.state.tx.us/co...
Now, can you get away without registering? Sure. Until the stuff hits the fan, everything is "allowed."
Disclaimer: I'm not an attorney and can misinterpret the law.
Again. Texas does not specifically define "transacting business". There is no specific requirement to register. I fully realize I give up my opportunity to bring a suit. However in my 34th year in this business I have never brought nor been involved in a lawsuit
If this was required, Title companies would require to issue title insurance which I assure you they do not
BUSINESS ORGANIZATIONS CODE
TITLE 1. GENERAL PROVISIONS
CHAPTER 9. FOREIGN ENTITIES
SUBCHAPTER A. REGISTRATION
Sec. 9.001. FOREIGN ENTITIES REQUIRED TO REGISTER. (a) To transact business in this state, a foreign entity must register under this chapter if the entity:
(1) is a foreign corporation, foreign limited partnership, foreign limited liability company, foreign business trust, foreign real estate investment trust, foreign cooperative, foreign public or private limited company, or another foreign entity, the formation of which, if formed in this state, would require the filing under Chapter 3 of a certificate of formation;
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Quote from @Peter Walther:
Quote from @Greg H.:
Quote from @Peter Walther:
Quote from @Greg H.:
Quote from @Peter Walther:
Quote from @Greg H.:
Quote from @Michael Plaks:
Quote from @Greg H.:
Just to clarify, you are not Required to register as a foreign entity. One just gives up certain rights like the ability to bring a lawsuit if they do not. I have bought and sold in 25 states and the only state that absolutely required it was North Dakota
You ARE required to register by Texas law:
https://www.sos.state.tx.us/co...
https://www.sos.state.tx.us/co...
Now, can you get away without registering? Sure. Until the stuff hits the fan, everything is "allowed."
Disclaimer: I'm not an attorney and can misinterpret the law.
Again. Texas does not specifically define "transacting business". There is no specific requirement to register. I fully realize I give up my opportunity to bring a suit. However in my 34th year in this business I have never brought nor been involved in a lawsuit
If this was required, Title companies would require to issue title insurance which I assure you they do not
I believe Texas considers an LLC to be an entity which is required to register to transact business. I also believe buying and selling real property would be considered transacting business. As a result, I further believe a title insurance underwriter would require a foreign LLC to be registered before insuring a conveyance out of or Deed of Trust from a foreign LLC. If you have a case and/or an underwriter's guidance saying otherwise I'd be interested in reading it.
While I typically do not always flip houses thru one of my Wyoming LLCs(Almost always a Texas LLC) I have done 30 + over the years utilizing them. I have flipped house in 25 states and the only state that forced me to register to close with title insurance was North Dakota.
Of course I can't speak to the requirements of the title agents you've dealt with, but here are the requirements of one title insurer that I worked for at one time and reflect the requirements as I recall them for all the other insurers I worked for at various times.
"If the conveyance is from an out-of-state LLC, a review of the law of the state of formation
for requirements with respect to organization, existence, and authority. Currently, all fifty
states and the District of Columbia have enacted LLC statutes that permit the qualification of
foreign LLCs. Failure to so qualify may render any purported conveyance or mortgage by the foreign LLC invalid. (emphasis added) The laws of both states must be checked to determine the classification and treatment of the LLC and its members. If an LLC is conveying, purchasing or mortgaging property in another state, the state where the property is located will recognize limited liability of the members and the existence of the foreign LLC entity;"
As I stated above, Texas does not define doing business and owning real property appears to be an exception.
As far as other states, I don’t profess to know the statutes in every state nor do I make statements on BP without actual knowledge. I have done at least 100 deals in other states at random title companies and only one state North Dakota forced me to register. So I can’t imagine this got by many many different underwriters nor was ever an exception to my title policy as the buyer or seller
All I can rely on is my thirty years of experience underwriting and doing claims for six various title insurance underwriters that covered about 2/3 of the US and none of them would have allowed a policy issuing agent of theirs to issue a title policy insuring a deed or mortgage (or deed of trust) from a foreign LLC that had not been domesticated.
Post: How to make money with the high property taxes in Austin?
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Personally, I would sell and take the tax free cash on this one. Your first concern is the property taxes and I assume you have the property as your homestead. Once it becomes a rental you will lose the benefits of the tax reduction AND the 10% increase cap. The value will then go up to make value and increase your property taxes even more
Additionally, these types of properties are almost never close to cash flowing in Austin. You will be cleaved with a potentially hefty negative cash flow as well as needing to be prepared for big ticket items such as a new roof, siding or mechanical repairs
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Quote from @Michael Plaks:
Quote from @Greg H.:
Yes, I did. Owning is different from buying, selling or leasing.
Title companies can use it as a loophole to minimize their work - something they do every chance they get.
I'm not an attorney, and I don't believe you are, either. Neither of us is then qualified to interpret the law. It's fine if we interpret it differently.
Your reasoning of "no title company ever gave me hard time over it" does not translate into "it's not a requirement." Just because nobody catches shoplifters does not mean that there is "no requirement" to pay for stuff.
We would not have had this discussion if you stated your experience more accurately, as in: "In my personal experience, you can continue to do transactions in TX with an out-of-state LLC without objections from title companies." This is NOT the same as saying "there is no requirement to register it."
So how does one own without buying? Aside From a very small percentage of transactions, an LLC buys a property. Again, the statute does not define "conducting business" yet you have. My Attorney as well as many underwriters and title company lawyers have the opposite interpretation as yourself based on the statute
Your anology reqarding shoplifting is litterally one of the worst I have encountered in all my years on BP. Title Insurance is insurance and the company providing said insurance is looking to avoid a claim as that costs them money. So.....if an LLC was required to register it would no doubt be a requirement to register
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Quote from @Peter Walther:
Quote from @Greg H.:
Quote from @Peter Walther:
Quote from @Greg H.:
Quote from @Michael Plaks:
Quote from @Greg H.:
Just to clarify, you are not Required to register as a foreign entity. One just gives up certain rights like the ability to bring a lawsuit if they do not. I have bought and sold in 25 states and the only state that absolutely required it was North Dakota
You ARE required to register by Texas law:
https://www.sos.state.tx.us/co...
https://www.sos.state.tx.us/co...
Now, can you get away without registering? Sure. Until the stuff hits the fan, everything is "allowed."
Disclaimer: I'm not an attorney and can misinterpret the law.
Again. Texas does not specifically define "transacting business". There is no specific requirement to register. I fully realize I give up my opportunity to bring a suit. However in my 34th year in this business I have never brought nor been involved in a lawsuit
If this was required, Title companies would require to issue title insurance which I assure you they do not
I believe Texas considers an LLC to be an entity which is required to register to transact business. I also believe buying and selling real property would be considered transacting business. As a result, I further believe a title insurance underwriter would require a foreign LLC to be registered before insuring a conveyance out of or Deed of Trust from a foreign LLC. If you have a case and/or an underwriter's guidance saying otherwise I'd be interested in reading it.
While I typically do not always flip houses thru one of my Wyoming LLCs(Almost always a Texas LLC) I have done 30 + over the years utilizing them. I have flipped house in 25 states and the only state that forced me to register to close with title insurance was North Dakota.
Of course I can't speak to the requirements of the title agents you've dealt with, but here are the requirements of one title insurer that I worked for at one time and reflect the requirements as I recall them for all the other insurers I worked for at various times.
"If the conveyance is from an out-of-state LLC, a review of the law of the state of formation
for requirements with respect to organization, existence, and authority. Currently, all fifty
states and the District of Columbia have enacted LLC statutes that permit the qualification of
foreign LLCs. Failure to so qualify may render any purported conveyance or mortgage by the foreign LLC invalid. (emphasis added) The laws of both states must be checked to determine the classification and treatment of the LLC and its members. If an LLC is conveying, purchasing or mortgaging property in another state, the state where the property is located will recognize limited liability of the members and the existence of the foreign LLC entity;"
As I stated above, Texas does not define doing business and owning real property appears to be an exception.
As far as other states, I don’t profess to know the statutes in every state nor do I make statements on BP without actual knowledge. I have done at least 100 deals in other states at random title companies and only one state North Dakota forced me to register. So I can’t imagine this got by many many different underwriters nor was ever an exception to my title policy as the buyer or seller
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Quote from @Michael Plaks:
Quote from @Greg H.:
Quote from @Michael Plaks:
Quote from @Greg H.:
Just to clarify, you are not Required to register as a foreign entity. One just gives up certain rights like the ability to bring a lawsuit if they do not. I have bought and sold in 25 states and the only state that absolutely required it was North Dakota
You ARE required to register by Texas law:
https://www.sos.state.tx.us/co...
https://www.sos.state.tx.us/co...
Now, can you get away without registering? Sure. Until the stuff hits the fan, everything is "allowed."
Disclaimer: I'm not an attorney and can misinterpret the law.
Again. Texas does not specifically define "transacting business". There is no specific requirement to register. I fully realize I give up my opportunity to bring a suit. However in my 34th year in this business I have never brought nor been involved in a lawsuit
If this was required, Title companies would require to issue title insurance which I assure you they do not
Semantics. It IS required by law, but what you're saying is that this requirement has not been enforced by title companies you dealt with.
And you cannot with a straight face claim that buying or selling real properties located is Texas would not constitute transacting business in Texas, under any conceivable definition.
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Quote from @Peter Walther:
Quote from @Greg H.:
Quote from @Michael Plaks:
Quote from @Greg H.:
Just to clarify, you are not Required to register as a foreign entity. One just gives up certain rights like the ability to bring a lawsuit if they do not. I have bought and sold in 25 states and the only state that absolutely required it was North Dakota
You ARE required to register by Texas law:
https://www.sos.state.tx.us/co...
https://www.sos.state.tx.us/co...
Now, can you get away without registering? Sure. Until the stuff hits the fan, everything is "allowed."
Disclaimer: I'm not an attorney and can misinterpret the law.
Again. Texas does not specifically define "transacting business". There is no specific requirement to register. I fully realize I give up my opportunity to bring a suit. However in my 34th year in this business I have never brought nor been involved in a lawsuit
If this was required, Title companies would require to issue title insurance which I assure you they do not
I believe Texas considers an LLC to be an entity which is required to register to transact business. I also believe buying and selling real property would be considered transacting business. As a result, I further believe a title insurance underwriter would require a foreign LLC to be registered before insuring a conveyance out of or Deed of Trust from a foreign LLC. If you have a case and/or an underwriter's guidance saying otherwise I'd be interested in reading it.
While I typically do not always flip houses thru one of my Wyoming LLCs(Almost always a Texas LLC) I have done 30 + over the years utilizing them. I have flipped house in 25 states and the only state that forced me to register to close with title insurance was North Dakota.
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Quote from @Michael Plaks:
Quote from @Greg H.:
Just to clarify, you are not Required to register as a foreign entity. One just gives up certain rights like the ability to bring a lawsuit if they do not. I have bought and sold in 25 states and the only state that absolutely required it was North Dakota
You ARE required to register by Texas law:
https://www.sos.state.tx.us/co...
https://www.sos.state.tx.us/co...
Now, can you get away without registering? Sure. Until the stuff hits the fan, everything is "allowed."
Disclaimer: I'm not an attorney and can misinterpret the law.
Again. Texas does not specifically define "transacting business". There is no specific requirement to register. I fully realize I give up my opportunity to bring a suit. However in my 34th year in this business I have never brought nor been involved in a lawsuit
If this was required, Title companies would require to issue title insurance which I assure you they do not
Post: Two states investments
- Broker/Flipper
- Austin, TX
- Posts 4,356
- Votes 4,255
Just to clarify, you are not Required to register as a foreign entity. One just gives up certain rights like the ability to bring a lawsuit if they do not. I have bought and sold in 25 states and the only state that absolutely required it was North Dakota