All Forum Posts by: Sean Morrison

Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.

An LLC is like a new person. You would give the property to the LLC like to anyone by creating a deed and filing it with your local Clerk of Courts. Keep in mind that transferring to the LLC may have some consequences. First, will your lender trigger a due on sales clause? Second, will you owe transfer taxes (that is very state, and even city specific sometimes)?

Property transactions aren't substantially different in Louisiana than anywhere else. Unless you're getting into pretty specific areas, or using unique tools like bond-for-deeds, it's the same game. You'll want to watch out for succession issues, which can be pretty different.

Sadly, it's pretty common for an attorney to pull a template if they're not well-versed in the types of entities you're working with.

Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.

There's really not much benefit and the costs are pretty high. In order to move it to an LLC, you would need to deed the property to the LLC, which gets into due-on-sale issues with the mortgage company. As an LLC, you would lose any homestead exemptions for property taxes. Insurance rates (both homeowners and flood insurance) would go up significantly. But if you want to do it because you have significant liability concerns, then talk to an attorney first.

Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.

What you are describing is a pretty advanced asset protection strategy. Based on what you're describing, I would assume you have an empire or real estate holdings with significant liability issues, and you already have significant insurance coverage. And be careful with (f). That's equity stripping and if done incorrectly could be fraud. Definitely worth talking to a lawyer. If you’ve got enough money and assets that you need a strategy at this level, then you have enough to afford an attorney.

Disclaimer: I am an attorney, but I am not your attorney. This is not legal advice, just friendly information.

I think your question is a little confusing. What I'm assuming you're saying is that you own an LLC, and the LLC is a partner in a deal. Not that your partner is part of the LLC. Is that correct?

If you fully own the LLC, you can put as many properties as you want in it. But if your partner owns any of the LLC, then he will also own part of any properties you put in. So it's really important that your paperwork is very clear as to who owns what.

As a general rule, real estate holding LLCs should be created in the same state as the property. While some states have better protections than others, when it comes to real estate courts only want to recognize local protections. If you want your Wyoming LLC as a holding LLC, you could do that, but it's just more paperwork.

No, but the annual plan is a clever way to make money. Over the long run, you'd pay more than an attorney.

You may want to talk to a syndication attorney before you move forward. First, typically in this kind of deal you're offer units rather than percentages. Whether it's a percentage or a unit, you don't have to dilute yourself. Second, you're now dealing in securities, and it sounds like you'll want to advertise, which is getting into some pretty tricky regulatory matters. You'll need an attorney to set up this round, and you should probably expect to pay five figures. So if $100 kills your profit, you can imagine what the legal fees will do. Otherwise, you're asking for trouble. This is one of the reasons syndication deals aren't done for small amounts.

The attorneys are correct. This is a messy probate situation that won’t be sorted out easily. Many properties across the country are stuck in this type of quagmire, and it’s just something you need to be aware of and avoid. Many title companies have a law firm attached, but you will need to pay their lawyers, and that won’t be cheap. There is no self-service solution here.