All Forum Posts by: Megan Templeton

Hi @Victor Andrade

I would recommend one property per LLC to minimize liability. If you have multiple properties in an LLC, if one property gets sued, the other is also at risk because they are grouped together in one bucket. One solution would be the series LLC. You can create individual child series underneath to separate out the properties, streamline biz activities, etc.

Thanks,

-Megan

Hi @Christopher Batista

Absolutely - I'm happy to help. Let me know what type of contract you are looking for and I can provide a few resources

Thanks,

-Megan

Hi @Ben Capone

Any time you have a renter, this is risk so its recommend to work with an LLC. The tricky part if the high expense of an LLC in CA. Unfortunately, even if you set the LLC up in another stat, as a resident of CA you will still be liable for the franchise tax. One option to get around this is the DST which isn't subject to the franchise tax, but that can be expensive to set up so you may want to hold off until you have more cash flow. Until you have the cash flow to justify an entity, I would make sure contracts are strong and you have both great property insurance and an umbrella policy. Insurance isn't the best line of defense (an LLC or DST is), but its a good starting place.

Thanks,

-Megan

Hi @Rebecca Samarelli

I would recommend a separate account for the property - particularly an account for the LLC. Using a biz account will give your greater protections and in some cases returns. A separate account also allows you to track biz vs personal expenses easier and have cleaner records.

Thanks,

-Megan

Hi there! @Oliver Hart

I would definitely recommend working through an LLC for your new property - particularly if you are going to have a lender, the LLC will likely be required. For LLC formation, you have a few options: you can work with a document provider like Legal Zoom, do it yourself through forms on the Secretary of State website, or go through a traditional law firm. I recommend going the law firm route. Trying to do the forms yourself the first time could be confusing and you may not be aware of all the wording needed in the operating agreement, the annual compliance costs/requirements/etc. Using a document provider like Legal Zoom may work in some cases but the docs are templatized and not set up to be individual to your business or scale well. You also wont have a team to guide you as your biz grows or how to stay compliant. I recommend a traditional law firm so you have an advisor from the start and as you grow, they can customize your set up, and help tackle any issues that come up as you go. Royal Legal Solutions is a good option to check out. They operate in all 50 states and offer customized LLCs with anonymity.

Thanks,

-Megan

Hi @Mike O.

The underlying piece that is important for the 1031 exchange is that your tax ID remain the same. If your LLC is pass through to your personal taxes, it shouldn't be an issue. It could also be depended on the state you live in (community property vs separate). I would recommend checking with your 1031 provider who can work with you to make sure the title complies.

Thanks,

-Megan

Hi @Debra C Benavidez 

I would recommend starting with an LLC - this allows you to ensure you are protected from the start and it also makes it much easier from an operational standpoint to get things set up correctly on the front end as opposed to making changes mid stream. For someone new in the field, I would say the biggest advice is to get a strong provider team in place (attorney,CPA, lender, etc) and learn as much as you can. A good team can help guide you and keep you from pitfalls you may not know to look for.

Thanks

-Megan

Hi @Tony Zhang

I would recommend using your LLC bank account to purchase the property to keep your records clean. If you need additional funds in your LLC bank account to purchase the property, you can do so by making an owner contribution to the LLC to add personal funds to your business account.

Thanks,

-Megan

Hi there! @Laura Da Silva

Royal Legal Solutions is a great resource for what you are looking for. They are a one stop shop operating in all 50 states have attorneys and CPAs on staff to assist with entity structuring, business planning, and tax planning.

Thanks,

-Megan

Hi there! @Devin Lembcke

I would recommend purchasing directly into an LLC from the start when you can. This will give you protection from the start of your biz. Depending on if a lender is involved, it could be complicated/costly to move the property to an LLC post closing. Using an LLC will give you liability protection, ensure your personal assets aren't at risk, and can save you on taxes.

Thanks,

-Megan