If you’re reading this, chances are you’re already hip to the benefits of forming a limited liability company (LLC) to manage your real estate investments. But you may not know that not all LLCs are created equally. How beneficial your LLC structure is to you depends heavily on the state where it is formed.
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I’m going to be brutally honest here. The upfront cost of an LLC isn’t bargain-basement cheap. But it isn’t bank-breaking, either. Regardless, I can also promise you that not setting up an LLC is more expensive, especially if you think about your finances in the long run.
There are many different types of LLCs available for real estate investors. Which one is best for you depends on a variety of circumstances, including your personal real estate goals. But one thing many investors initially overlook is that each type of LLC comes with its own tax possibilities and obligations.
A properly drafted operating agreement can greatly enhance the liability protection. An improperly drafted operating…