All Forum Posts by: Mitchell Zoll

Check the original filing documents of your LLC. You declared a "purpose" when you filed it. Most are a general statement of purpose such as "all lawful business.." If the purpose isn't limited and you are the only member, you should be good to operate your LLC for any business purpose - pet care, real estate, and even real estate for pets (very niche market). If you are getting into multiple properties as a real estate business, please visit with a CPA and a lawyer to come up with a game plan on how to arrange the LLCs. The most important step is to make sure you have a plan on how to operate the business that is specific to your situation.

Quote from @Marcus Holloway:

What happens, beneficiary wise, if one of the members pass away in a 2 man LLC and no operating agreement is in place? (We have an operating agreement, I'm just curious) Thanks.

State laws will control. Most states have “default” provisions for entities such as LLCs.  While the statues provide guidance on what to happen upon death or divorce, it is good to craft your own so to know what will happen when an event occurs. A company agreement can also provide insurance and other protections for the company and the owners family. 

Hello Tom -happy to connect you to a friend of mine that sets up physical locations for entities when I help clients form new LLCs. Send me a note through the bp messaging if you are still looking and I can connect you. 

Mitch

Quote from @Dakota Mivshek:

Owner of an operating company looking for REI Friendly CPA for a long term fit.

We do business (Brokerage, Flips, rentals) in CO, FL, and Texas.

Also looking for attorney to help streamline our current LLC setup and readiness for JV deals on flips.

 Hello Dakota - I’m also in Austin and happy to connect if you are looking for help. Www.zollfirm.com 

Mitch 

Quote from @Julie Belton:

I am about to close on my first property in Tucson, and I am planning on listing my other home on airbnb ( and in a year, adding the tucson property). I have an LLC that is an S-Corp that I am not really using, but have the EIN, Bank accounts and Credit cards all set up. Can I just run my airbnb business through that doing a DBA, without having the LLC own the properties? Thanks in advance for your feedback.

You would hire the LLC to act as the property manager for the property owner. Set up the agreements between owner and manager and then agreements between the manager and tenants. Check with a cpa on how to manage expenses and cost accounting. 

@Ronald Rohde The confusion I see is that people think simply having an LLC (or a series LLC) means the plaintiff won't sue because it's "not worth it" (from a post I saw recently on another board). Folks on these discussion boards think that having an LLC or series LLC will somehow dissuade the Plaintiff's lawyer from recommending a lawsuit. I've defended litigation filed against property owners and from personal experience that's just not what happens. The original post asked about anonymity, and my response was just to make sure they understand that "anonymity" in the context of litigation just isn't' going to be a thing.

@Tim Nethers there are a few ways to structure the deal. You can handle it through an LLC with an operating agreement, or with a contractual JV agreement with you (or your LLCs) as a party to that agreement. This is the value when working with an attorney. They can walk you through the options and decide the right approach, then also help explain the document you use and how it works in various situations. Find a good Florida attorney to help you through this. A form you find online might be worse than no contract at all.

Hey @Spencer Cuello  -if you haven't already done it (and hopefully you haven't) it is good advice above to avoid using a Quit Claim Deed in Texas.  There isn't a cost difference to filing a special warranty deed or general deed versus a quit claim deed, and the chain of title is secured by using proper deed documents rather than a quit claim.  As Phillip mentioned, quit claims in Texas are just that, a representation that the person no longer claims an interest in the property... it is not a representation that they had an interest in the first place. It is good advice to just avoid them here in Texas!

@Alan Scott - you might be served to file the LLC in Texas where the property is owned. Texas does not require annual filing fees for an LLC like California does (and does not tax the LLC until the revenue is significant). Real estate laws in Texas would impose duties on the owner of the property, but if you have the entity in California, you might also be subject to their laws regarding business entities, doubling the number of laws you have to check in maintaining your LLC. CPAs can file the paperwork but don't traditionally handle the creation of the Company Agreement and related documents. It's a relationship between both providers, but when I have had clients come to me with a CPA formed entity, they are often missing key documents and "education" that a lawyer should provide. To do it right you need them both!

First ask yourself if you need to have the properties in an LLC. If you have a personal mortgage on either property, a lender may not permit the transfer to an LLC. (remember they have different rates for commercial versus personal residential mortgages, and by moving from personal to commercial, you change the nature of the loan.) If you own them outright, then decide if you want to own/operate both properties the same way. If you are flipping one and holding the other long term, it might make sense to have them in separate LLCs. But if they are both the same investment strategy and you aren't looking to take on investors or leverage the property to buy others, then one LLC might be the way to go. It's a decision to work through with a lawyer and a CPA.