All Forum Posts by: Scott Smith

For the property transfer, what you want to do is acquire the property in your personal name and then transfer to a land trust that is owned by the LLC. This gives you protection and anonymity without getting in any trouble with the due on sale clause

@Ronald Rohde @Carmen Massie

I don't know why you wouldn't use a Texas series LLC if you have multiple assets: (1) it compartmentalizes everything which is better than the traditional LLC and (2) Texas is much cheaper than Nevada

@Ronald Rohde @Barry Je

I agree you need a lawyer that understands the AP as well as the taxes. It's going to be tough to get good info without paying for a consultation because from the attorney perspective once they lay down all the cards of what you "should" do then it could be easy to farm out for much cheaper...

@Marc Biedenkapp I'm officed Austin if you want to meet up. I can fill you in on local recommendations.

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You could form up an LLC cheap out of state (Texas for $300 or other states for under $100 in filing fees) and then own the property in RI in a land trust (with the Trust being in turn owned by the LLC). Since the Trust would own the property in RI it would not be subject to the yearly fees that are due by the LLC. Similarly, if you chose a Texas LLC, there are no yearly franchise taxes or fees.

@Anthony Thompson

@Nancy DeSocio

@KEVIN FLYNN

@Anthony Bertolino @Jay Helms

Two quick points:

(1) the number of properties in an LLC is not the defining point, it is the amount of equity exposed that really care about. I recommend never holding more than $1MM in any LLC or Series LLC because at that point the amount of equity justifies the "legal insurance" of an LLC.

(2) You can form a Series LLC in Texas/Nevada/Delaware and use it in any other state (just like tons of companies do with the Delaware LLC)

(3) You want to avoid the due on sale clause by transferring the property into a land trust (transfers to a trust won't trigger the clause) and then have that trust owned either by an individual series of a Series LLC OR by a traditional LLC. This method also creates anonymity of ownership and offers the liability protection

You may want to consider establishing a Series LLC through Nevada/Texas/Delaware and then using that LLC in Washington. A local attorney may have heard or know of how to do it, but it's 100% legitimate to form an LLC in one state and use it in another.

@Steve Osowicz has this right

@Michael Plaks @Darrin Carey I like to use the Series LLC with anonymity trusts for the Asset protection piece and it has the secondary benefit of also being pass through ("disregarded") for the asset holding company. The S-Corp is only used to be a property manager and to avoid self employment taxes. What would happen is the Asset Holding LLC would pay the S-Corp a "property management fee" which is in turn paid to the real estate investor as a salary. Is it worth all the trouble? Typically only if your churning more than 50k through the S-Corp a year.