All Forum Posts by: Mike S.

Cozy.co will let you tenant do ach for free. They can also use debit or credit card for a fee.

I would suggest that you do some more research on the subject as there are pro and con of using LLC. You will find plenty of great post in this forum already on the subject.

As a general rule, but your specific case may need different answers:

- You would need to have the LLC in the same state than the property. You may create a holding LLC in WY or NV that will own all these sub LLC. If you are in a state that offers series LLC, you may also look at that option that could lower the LLC cost.

- The number of property per LLC is dependant on your risk tolerance and setup/reccuring cost for each entity. You can loose ALL the asset of one LLC, but the concept is to avoid propagation to the other LLC. So you may want to put 5 properties for a total value of $100k in one, while you will have another $120k single property in its own LLC.

- You can transfer any property to your LLC. It is tax neutral. You will hovewer have to issue a new warranty deed, creating some filing and stamps fee. Be aware that if you have a mortgage on the property, the transfer to an LLC may trigger the due on sale clause (that could be avoided using a land trust). Also once in the LLC, it will also limit your availability of refinancing (more expensive commercial lender).

-LLC is not a susbtitute for liability and umbrella insurance.

Yes each LLC will cost you some money:

Initial cost: initial filing, operating agreement drafting (preferably by a lawyer knowledgeable in asset protection; avoid the basic legalzoom template). It may cost you between $200 for a DIY route to over $3000 for a full service attorney solution.

Recurrent cost: annual filing (varies widely, some state having no requirement, while other could cost over $800), registered agent (usually between $35 to $100)

If you would be collecting rent through your LLC (and you should), then your LLC need to be registered in the State where the property is. Same if you need to evict a tenant, if your LLC is not registered in the state you won't have legal authority to go to court.

Now some will tell you that you can have an LLC in another state, and foreign register it with the state where the property is. Yes you could, but you would be paying registration in both state. Why not paying once in the property state then?

Also some state do not offer good charging order protection.

For all these reason, it is often suggested the following setup:

Create a single member LLC in each state where you have property. These LLCs being disregarded for federal tax purposes won't require any filing (but you may in some state have some state filing).

Create a holding LLC that will be the single member of all these LLCs. Choose a state with good charging order protection. Also, you may want to add anonymity. Two good states usually recommended are WY and NV.

This holding LLC will be the one filing taxes every year if it is a multi members (1065 and issue k1 to members), or could be disregarded for single member and filed on your own tax return.

Some states will offer series LLC. They are great if you have many properties in these state, but that won't add any benefit if your properties are in another state as you will then be back to the foreign filing requirement.

Some good pointers here:

http://clintcoonsblog.com/?s=land+trust

https://www.youtube.com/watch?v=0HixJDgupss&list=P...

A Land Trust will not provide any level of asset protection (except in FL). It will however create anonymity (that will help to hide your asset when someone is evaluating the cost/benefit of a lawsuit against you); it can protect you against the due on sale clause of a mortgage (Garn St Germain Act); it also let you transfer the underlying property without a deed letting you avoid some transfer fee in some states.

An LLC is mainly used an asset protection tool to limit the liability. If it is set up and maintained properly, it should provide inside and outside protection. Inside protection means that a liability created by something happening within the LLC should not put at risk your other asset held outside of the LLC. Outside protection means, that if you are sued personally for something happening outside of the LLC, the asset of the LLC should be out of reach. Inside protection is almost the same in every state. Outside protection however varies greatly depending where your LLC is registered; you would want to use a state that has the charging order as sole remedy.

Usually, you would use the Land Trust to own the property, then transfer the beneficial interest to an LLC. You get the anonymity of the Land Trust with the asset protection of the LLC.

I have been using Zelle for a few years without problem. I am starting a new tenant on Cozy.

In my view, you only need one account per owner. If I owned multiple property in my own name, I wouldn't get multiple accounts, just good book keeping is eough to know what each property returns are.

Now If you have multiple LLCs, each LLC will have its own account. But if the LLC owns 5 property, there will be only one account.

In addition to the one account per owner, you may want to add one savings account per owner to segregate some reserve that you are making for taxes or repair. You may also need another separate account to hold security deposits depending on your State laws requirements.

Put the property in a Land Trust where you are still the beneficial interest holder. The Garn St Germain Act will protect you against a due on sale clause.

Then later do an assignment to your LLC. This document being private and not recorded, should not trigger it.

If you are still the beneficial owner of the land trust, it WILL NOT trigger the due on sale clause (Garn St Germain Act).

Now when you later assign the interest to your LLC that may trigger it, but as it is a private assignment that is not recorded, nobody should know about it. In case you are put in a situation where you are asked to prove that you are still the beneficial owner, nothing blocks you to reassign the beneficial interest to you from the LLC at that time.