I was told by HUD I need to form a holding company...best way to?

[Phil B.]

I am under contract on a complex that has a 20 year HAP in place for low income independent seniors. My half of the capital for the purchase is coming from a 1031 exchange. Since I am partnering on this new complex deal, we needed to form 2 LLC's with tenants in common to satisfy the 1031 requirements.

HUD indicated that the HAP would need to be assigned to a single entity, so we'd have to form a holding LLC for the 2. We were planning on forming a holding LLC anyway, since we own 2 multi family properties in separate LLC's on the east coast.

What's the best way to go about forming this holding company? I was told Wyoming was the best place to do this for anonymity and tax benefits. Does anyone have a recommendation for a company that forms holding LLC's in WY and acts as a registered agent? What are the fees associated with this? Thanks

[Scott Smith]

@Phil B., Here are a few reasons for forming a LLC in Wyoming:

• No state taxes
• Asset protection and limited liability
• Members nor Managers are not listed with the state
• Best asset protection laws
• No citizenship requirements
• Perpetual life
• Transferability of ownership
• Ability to build credit & raise capital
• Number of owners is unlimited
• Lower startup costs- with Registered Agents of Wyoming LLC, the cost of forming an LLC is affordable.

I have formed many LLCs in Wyoming, generally operating LLCs. Series LLC are generally seen as a better structure to hold investments, since they have a parent-child structure and have infinite scalability, offering creative solutions for investors. I listed states that offer these in this article: https://www.biggerpockets.com/blog/best-states-forming-llcs.