Real Estate LLC Advice

[Alex Kamunyo]

Hey everybody,

Does anyone have any advice for starting an LLC with partners? Our intention is to create an LLC to hold a few rental properties in. What should we make sure to include in our LLC as far as operating agreements, EINs, and licenses, etc.? I'm just curious about the nuances that come along with establishing one. We plan to do it through LegalZoom. Any help/advice is appreciated.

Thanks

[Brian Schmelzlen]

LegalZoom is fine, but if you are not going to consult with an attorney I would at least consult with an accountant (not the same as an attorney, but should be able to point out most of the basics to you without giving you "legal advice").

If you have an LLC with multiple owners, you need an EIN and probably a state ID number as well. Applying for an EIN is a simple, quick process you can do through the IRS website. You will definitely want an operating agreement; I think it makes sense to do that through an actual attorney so it is customized to you and your partners (and covers all eventualities including the death of one of your partners). You will need a separate bank account for the LLC. One of the biggest problems LLCs run into is "commingling funds" so having a separate bank account for the LLC is a necessity; along the same lines it may makes sense to have a debit or credit card for the LLC for any necessary business expenses.