Investing in So. Florida. What Entity to use? LLC, Land Trust?

[Will F.]

Hi so I'm from California and investing in So. Florida. I was by default going to set up a Florida based LLC with my partner.

This is a buy and hold, rental income property.

How would you go about setting up an entity out of state?  

What's the difference between an LLC vs Land Trust for an out of state owner?

Any other suggestions for a California resident investing in FLorida?

[Clint Coons]

@Courtney Wenzel There are several reasons to use a land trust, e.g., anonymity of ownership, avoid doc stamps with encumbered real estate, avoid personal judgment liens from attaching to the real estate, buying at auction, keeping transfers private. Here are some differences between a land trust and LLC:

Land Trust

Anonymity - if the land trust is set up with a nominee trustee, then title to real estate can be held privately.  Privacy - a land trust is not recorded, so a third party can not discover the parties to the trust.  Transfer taxes - encumbered property transferred into a land trust is exempt from doc stamps.  Asset protection - the beneficiaries of a land trust are not liable for judgments against the trust; however, judgments against a beneficiary can be levied against the assets of a land trust.

LLC

Anonymity - if title is taken in the name of a FL LLC, a third party can discover who is associated with the LLC by looking up the member/manager information on sunbiz.org. However, if the FL LLC is set up with a WY LLC (or other LLC that does not disclose the identity of its member/mangers), then anonymity can be achieved. Privacy - information about the members/managers of a FL LLC is disclosed on sunbiz.org because of required public filings.  Again, this can be avoided if using a holding LLC as discussed previously.  Transfer taxes - encumbered property transferred into a FL LLC is not exempt from doc stamps. Asset protection - members of an LLC are protected from claims against the LLC.  If a FL LLC has only one member, then a judgment against a member can be levied against the ownership interest of the LLC, i.e., you can lose your LLC.  If the FL LLC has two or more members, then a member is protected from levies against the LLC ownership because of "charging orders."  

I know this is very brief, but if you want to learn more, you can view my youtube channel real estate asset protection for several videos on this subject.