Do you use an LLC for your RE business?

[Andrey Y.]

Hello all, hope this is the correct forum for this sort of thing. Does anyone use an LLC (or other Corp) to conduct their real estate business in Alaska? I was just reading about having to appoint a registered agent to act on behalf of the LLC. I am not sure if this is standard business practice in forming LLCs in other states. In any case, for rental properties (SFRs and apartments), do you believe an LLC is the way to go, for both SFRs and apartments, one, neither? Without soliciting anything, did anyone find any particular registered agent easy to work with/affordable? I very much appreciate your feedback!

[Scott Sewell]

Hey @Andrey Y.,

I agree with @Jonathon Rodriguez on this one.

On the advise of our attorney, we set up 4 LLC's. First, is our property management LLC which transacts ALL business with tenants and vendors, except for capX expenses, mortgages, property taxes, and insurance expenses. In other words, tenants, (our biggest exposure to risk) deal only with this company, which owns NOTHING, and in turn lease(s) the property (s) from one of 3 Ownership LLC's (one for each property). These LLC's pay the above mentioned expenses and Us. As a matter of course, all these companies keep very little cash on hand (or in their bank accounts), so as not to appear as easy targets for a lawsuit, should any over zealous attorney (or tenant) go snooping.

Bookkeeping for this process gets a little involved, but once you train yourself, isn't difficult. Especially for the piece of mind, and to develop good business practices in general.

Hope this helps,

If you have any questions, shoot me a colleague request and we can PM the particulars.

Scott