All Forum Posts by: Megan Templeton

I think its a great plan. It complies with the 1031 requirements while also seperating out asset holding from operations which can help with minimizing liability. I would recommend that you work closely with your CPA as you go down this path to ensure you are complying with the applicable tax laws, particularly around working with foreign nationals, and to ensure you are minimizing the taxes that could come into play.

Being a California resident can be a trick when navigating LLCs with due to the franchise tax. While using an LLC or Scorpt to own propertly remotely wouldnt require a foregin filing in the state of the property (property can be held remotely without needing a foregin filing as its not "doing business" in the state), the issue you will run into with an LLC or corporation in CA is the yearly fee. To avoid the yearly fee, we recommend using a DST. It avoids the CA franchise tax, is scalable so you can add multiple assets under it while benefiting from the liability minimixation structure of child series' , and it can streamline your operations by using one set of books, bank account, etc. The DST can minimize liability bu having each property in its own child series, streamline your operations, and minimize taxes.

Hi there! Stats say that if you are an investor for more than 10+ years, you have a 90% chance of being sued at some point. For long term investors, its not so mcuh of if you will be sued, but when. While insurance is a good first line of defense, it is not conclusive. Insurance companies are a business and inside of that looking to mitigate costs. In doing so, they will often find reasons to not pay out on a claim. If thats the case for you, you want a true line of defense in a lawsuit - thats where an LLC comes in. An LLC separates you from your business so that if your are sued, your personal assets arent at risk. There are always ways to mitigate business liability by seperating out assets - a series LLC is a great example of this. Using an LLC not only provides liability protection but can open up opportunities for you for working with 3rd parties such as lenders or partners who require an LLC. If your LLC is set up correctly, the operations and financial pieces of it can be minimal and easy to manage. We recommend using a streamlined structure such as a series LLC to minimize bookkeeping, banking, etc. An LLC is the best option to protect yourself and how that LLC is set up and maintained is something that our team can assist with setting up in a minimally invasive way.Hi there! Stats say that if you are an investor for more than 10+ years, you have a 90% chance of being sued at some point. For long term investors, its not so mcuh of if you will be sued, but when. While insurance is a good first line of defense, it is not conclusive. Insurance companies are a business and inside of that looking to mitigate costs. In doing so, they will often find reasons to not pay out on a claim. If thats the case for you, you want a true line of defense in a lawsuit - thats where an LLC comes in. An LLC separates you from your business so that if your are sued, your personal assets arent at risk. There are always ways to mitigate business liability by seperating out assets - a series LLC is a great example of this. Using an LLC not only provides liability protection but can open up opportunities for you for working with 3rd parties such as lenders or partners who require an LLC. If your LLC is set up correctly, the operations and financial pieces of it can be minimal and easy to manage. We recommend using a streamlined structure such as a series LLC to minimize bookkeeping, banking, etc. An LLC is the best option to protect yourself and how that LLC is set up and maintained is something that our team can assist with setting up in a minimally invasive way.

We typically recommend working with a personal loan when possible as you will get the best rates. The property can be moved into a liability protection structure post closing, in many scenarios, but a personal loan on the front end can save you costs in the long run.

Great choice working with a series LLC! One of the biggest benefits of using the series LLC is that you can utilize one bank account, set of books, etc in the name of the parent series. This is accomplished by opening one account in the name of the parent series, using it for transactions for all funds for all properties, and ensuring that each transaction is tracked in your bookkeeping by taking the relevant property to it. Most banks can accommodate this set up for you, but for a particular recommendation, we work with Solera a lot and really enjoy their team and ease of their systems. I would love to chat more and share some articles related to this. Feel free to connect with me.

Doing a cash out refi is a great idea. Working with your lender, you an take out only the amount you need to preserve some equity in the home as it appreciates. The cash out refi can then be used to purchase a new investment property. An LLC is the right call for investment properties as it will protect you personally from any issues that may arise. Your lender can assist with ensuring the LLC fits into your lending plan well. Additionally, properties can be purchased in your name and move over post closing to an LLC in many scenarios.

Depending on the type of property and type of loan, the property can be moved post closing to a trust without trigger the due on sale clause. This is due to an exception called the St. Germain Act. The St. Germain Act states that a property with less than 5 units can be transferred under certain circumstances. The full text of the st gertmain Act can be found here: https://www.law.cornell.edu/uscode/text/12/1701j-3. If you have a residential SFH, you should not have an issue transferring title post closing a land trust (which can be connected to an LLC) as long as you remain the ultimate owner.

You will sign on behalf of the LLC. For example, if you are the manager of the LLC, your signature line would be as follows: "[Your Name], Manager of X LLLC". The LLC is ultimately listed but you are listed with a designation of why you have authority to sign (i.e. manager, owner, etc)

California can be a tricky state to navigate LLCs with due to the franchise tax. While using a CA LLC to own propertly remotely wouldnt require a foregin filing in the state of the property (property can be held remotely without needing a foregin filing as its not "doing business" in the state), the issue you will run into with an LLC in CA is the yearly fee. To avoid the yearly fee, we recommend using a DST. It avoids the CA franchise tax, is scalable so you can add multiple assets under it while benefiting from the liability minimization structure of child series', and it can streamline your operations by using one set of books, bank account, etc. Feel free to connect with me as well.

Hi there! Stats say that if you are an investor for more than 10+ years, you have a 90% chance of being sued at some point. For long term investors, its not so muh of if you will be sued, but when. While insurance is a good first line of defense, it is not conclusive. Insurance ompanies are a business and inside of that looking to mitigate costs. In doing so, they will often find reasons to not pay out on a claim. If thats the case for you, you want a true line of defense in a lawsuit - thats where an LLC comes in. An LLC separates you from your business so that if your are sued, your personal assets arent at risk. There are always ways to mitigate business liability by seperating out assets (you have touched on this with a series LLC). Using an LLC not only provides liability protection but can open up opportunities for you for working with 3rd parties such as lenders or partners who require an LLC. If your LLC is set up correctly, the operations and financial pieces of it can be minimal and easy to manage. We recommend using a streamlined structure such as a series LLC to minimize bookkeeping, banking, etc. While the series LLC is model which hasnt been tested as frequently as other concepts, it has held up when tested and there is strength in that not a lot of suits have been brought regarding the structure - lack of suits implies that people know it works. An LLC is the best option to protect yourself and how that LLC is set up and maintained is something that our team can assist with setting up in a minimally invasive way.