Company/LLC Name ideas

[Sean Delagrange]

Hey Everyone,

Quick question I'd love some advice on. Just bought my first rental property and I'm going to form an LLC and move it over to that ownership. The goal is to purchase more properties over the years mainly as income/cash flow producing investments, with the occasional flip down the road as well.

My question is around the suffix before the "LLC" in the company name. I've seen posts on here about this, but I'm curious what the consensus favorites are (and if there are any that are not advisable or that raise red flags - that will be very helpful). I've seen some people say not to use "investments" or "properties" for fear of lenders not dishing out loans, but I've had really no problem so far and I've been up front that I'm purchasing as an investment property. Would an LLC change that?

Here’s what I’m choosing between, in no particular order. We’ll use XYZ as the placeholder before the suffix.

XYZ Properties, LLC

XYZ Capital, LLC

XYZ Real Estate, LLC

XYZ Homes, LLC

XYZ Investments, LLC

XYZ Holdings, LLC

XYZ Assets, LLC

XYZ Property Group, LLC

XYZ Equities, LLC

XYZ Ventures, LLC

What are your thoughts? I really think “Capital” is clean and sharp, but does it make sense here? I like the others too, but assuredly not every option will be available when I file so I’m just trying to narrow it down.

Thanks in advance!

[Sean Delagrange]

@Zach Lemaster

[Matt Nico]

Originally posted by @Sean Delagrange:

Hey Everyone,

Quick question I'd love some advice on. Just bought my first rental property and I'm going to form an LLC and move it over to that ownership. The goal is to purchase more properties over the years mainly as income/cash flow producing investments, with the occasional flip down the road as well.

My question is around the suffix before the "LLC" in the company name. I've seen posts on here about this, but I'm curious what the consensus favorites are (and if there are any that are not advisable or that raise red flags - that will be very helpful). I've seen some people say not to use "investments" or "properties" for fear of lenders not dishing out loans, but I've had really no problem so far and I've been up front that I'm purchasing as an investment property. Would an LLC change that?

Here’s what I’m choosing between, in no particular order. We’ll use XYZ as the placeholder before the suffix.

XYZ Properties, LLC

XYZ Capital, LLC

XYZ Real Estate, LLC

XYZ Homes, LLC

XYZ Investments, LLC

XYZ Holdings, LLC

XYZ Assets, LLC

XYZ Property Group, LLC

XYZ Equities, LLC

XYZ Ventures, LLC

What are your thoughts? I really think “Capital” is clean and sharp, but does it make sense here? I like the others too, but assuredly not every option will be available when I file so I’m just trying to narrow it down.

Thanks in advance!

 Sean,

You do not need an LLC with 1 property. If you'd like to create it go for it, but I would absolutely NOT move the property into the LLC. It could trigger a due on sale clause. If you are worried about liability with the home being in your name, don't be (yet). When you are a small organization you usually don't have anything worth taking. Continue to put properties in your own name as this gives you the best interest rate and terms. As you grow I would look into an "Umbrella Policy" which actually protects you just as well if not better. Listen to the real estate rookie shows. They talk a good amount on this subject.

Also for your LLC name, here are thoughts:

1. If you are planning on going to be a full time real estate investor now, start telling people what you are doing and think of a good name. As an example, mine has "Estates" on the end. People love it.

2. If you do create one, I created a branded logo and named my LLC. I have T-shirts, Business cards, and my truck is a very specific color which everyone knows me by. To everyone who know me, I am "The guy who knows real estate"

Hope this helps,

Matt

[Sean Delagrange]

@Matt Nico interesting, this is the first I have heard of this. Thanks for pointing it out. Do you have a specific real estate rookie show you can point to that talks about this topic and how to avoid that clause? I would love to give it a listen very soon. I know multiple people who have their property in an LLC, so I wonder what they did to avoid it.

[Zach Lemaster]

No preference in name. Go with what you like. It won't matter on the lending side if the LLC part of the name or not. It will matter how your business is structured. Conventional lenders do not lend to businesses, they lend to individuals so you would have to take financing in your own name anyways.

[Matt Nico]

Originally posted by @Sean Delagrange:

@Matt Nico interesting, this is the first I have heard of this. Thanks for pointing it out. Do you have a specific real estate rookie show you can point to that talks about this topic and how to avoid that clause? I would love to give it a listen very soon. I know multiple people who have their property in an LLC, so I wonder what they did to avoid it.

Sean,

I am not sure of the exact show, but I know a couple of the most recent shows talked about the LLC thing. I'd start there.

Those "Multiple People" who you are referring to that you know are either costing themselves money by buying properties in an LLC that they dont need (to start out), or they are much larger of a business than you, and need the LLC to put properties in because banks usually cut you off around 10 properties under your own name. To be perfectly blunt (sorry I'm a very direct person), you have not earned the right to have the same problems as the other people you know.

You have 1/10 properties in your own name.... Once you get to 5-6, then worry about it...haha. 

[Sean Delagrange]

@Matt Nico they have 2 properties each, lol. So maybe they are costing themselves money?

And if I purchase the property in my name with favorable terms, then move to an LLC, those favorable terms might not stick? Sorry for the questions, appreciate the help. Seems like I need to read up on it. Luckily the close date isn't until July.

[Matt Nico]

Originally posted by @Sean Delagrange:

@Matt Nico they have 2 properties each, lol. So maybe they are costing themselves money?

And if I purchase the property in my name with favorable terms, then move to an LLC, those favorable terms might not stick? Sorry for the questions, appreciate the help. Seems like I need to read up on it. Luckily the close date isn't until July.

 Sean,

They could be costing a lot of money yes. Let me answer it better:

When you put properties into your own name, you get an advantage of lower interest rates and better terms. So if you buy a property under your own name with a conventional loan right now, you would be able to get around a 2.5%-3% rate and 5% down payment depending on your credit. If you buy a property under an LLC right now, you are looking at a 4.5%-5.5% rate with 20% down. That 2%-3% difference is hundreds of dollars a MONTH that you dont get to keep, plus the extra down payment.

So while you are a small rental property investor, take advantage of the low rates and low down payments while you can!!!! I'm at 5 properties right now and they are all under 3.25% interest rate and in my own name. Soon, I will have to transition to 5% with my LLC, but I want as many low-rate loans as possible.

The LLC can be created now if you want. For reference, I created mine when I bought my 4th property. The way it would structure is when you do your taxes, you run the income you are making through your rentals through the LLC even though the LLC does not own them. This will give your LLC time to establish so when you need to borrow money and possibly get a company vehicle or credit cards, your LLC has 2 years of history.

I hope this better clarifies. I would find a good CPA and talk to them about this. Maybe in your state this wont work. As a reference, I am located in Florida. Feel free to respond to this with any questions or PM me in the future.

-Matt

[Joe Splitrock]

@Sean Delagrange generally speaking if you have the loan in your name, moving to an LLC doesn't accomplish much of anything. If anything it gives you a false sense of security. Most investors starting out, holding the loan in their own name and self managing, are piercing the corporate vail and can easily be held personally liable. Make sure you hold good liability insurance that names you and your LLC.

As far as an LLC, here are some thoughts:

1. Make sure XYZ has no connection to your name. Don't use your last name or your initials. The purpose of an LLC is liability protection not ego stroking. You want yourself separated from the business so using your name connects you for no benefit.

2. Pick something generic like Oak Street Properties. If I did a Google search on Oak Street Properties, millions of results will be returned. Compare that to Atroosty Properties, which would return one result if I named an LLC that. The point is you want anonymity, which means you want to harder to find, not easier to find.

3. Your LLC name doesn't need to be your company name. You can have a DBA (doing business as) which is your company name and you can hold multiple LLC with different names. In fact I would argue your LLC should not be your company name when it comes to rental properties. If you scale, you will want multiple LLC, so locking your company name to a specific LLC doesn't make sense.

4. Banks don't care what your LLC is called. All they care about is your financial history of the LLC. Since the loan is in your personal name, the LLC will be creating no financial history.

5. Hold the LLC with a law firm that will mask your personal address. In some states, LLC owners and addresses are public record. This can actually make it EASIER for tenants to find your home, assuming you used your personal address for the LLC address. You can have a law firm hold the record at their address.

6. I would say @Matt Nico and the Rookie podcast are working off old information. It was true in the past with Fannie Mae and Freddie Mac backed loans, that you could not transfer to an LLC. Both of these mortgages can now be transferred due to rule changes over the last few years. Check your mortgage before you do it, but unless the mortgage is 5+ years old, I wouldn't be concerned.

[Matt Nico]

Originally posted by @Joe Splitrock:

@Sean Delagrange generally speaking if you have the loan in your name, moving to an LLC doesn't accomplish much of anything. If anything it gives you a false sense of security. Most investors starting out, holding the loan in their own name and self managing, are piercing the corporate vail and can easily be held personally liable. Make sure you hold good liability insurance that names you and your LLC.

As far as an LLC, here are some thoughts:

1. Make sure XYZ has no connection to your name. Don't use your last name or your initials. The purpose of an LLC is liability protection not ego stroking. You want yourself separated from the business so using your name connects you for no benefit.

2. Pick something generic like Oak Street Properties. If I did a Google search on Oak Street Properties, millions of results will be returned. Compare that to Atroosty Properties, which would return one result if I named an LLC that. The point is you want anonymity, which means you want to harder to find, not easier to find.

3. Your LLC name doesn't need to be your company name. You can have a DBA (doing business as) which is your company name and you can hold multiple LLC with different names. In fact I would argue your LLC should not be your company name when it comes to rental properties. If you scale, you will want multiple LLC, so locking your company name to a specific LLC doesn't make sense.

4. Banks don't care what your LLC is called. All they care about is your financial history of the LLC. Since the loan is in your personal name, the LLC will be creating no financial history.

5. Hold the LLC with a law firm that will mask your personal address. In some states, LLC owners and addresses are public record. This can actually make it EASIER for tenants to find your home, assuming you used your personal address for the LLC address. You can have a law firm hold the record at their address.

6. I would say @Matt Nico and the Rookie podcast are working off old information. It was true in the past with Fannie Mae and Freddie Mac backed loans, that you could not transfer to an LLC. Both of these mortgages can now be transferred due to rule changes over the last few years. Check your mortgage before you do it, but unless the mortgage is 5+ years old, I wouldn't be concerned.

 Joe you put things into words much better than I ever can...haha. Your explanations are great.

I was not aware of rule changes for Freddie/Fannie loans. But the same concept would hold true...what would be the point of transferring over? Why even give the bank an option to be able to exercise the due on sale clause? An umbrella policy should solve any problem of liability.

[Joe Splitrock]

Originally posted by @Matt Nico:

Originally posted by @Joe Splitrock:

@Sean Delagrange generally speaking if you have the loan in your name, moving to an LLC doesn't accomplish much of anything. If anything it gives you a false sense of security. Most investors starting out, holding the loan in their own name and self managing, are piercing the corporate vail and can easily be held personally liable. Make sure you hold good liability insurance that names you and your LLC.

As far as an LLC, here are some thoughts:

1. Make sure XYZ has no connection to your name. Don't use your last name or your initials. The purpose of an LLC is liability protection not ego stroking. You want yourself separated from the business so using your name connects you for no benefit.

2. Pick something generic like Oak Street Properties. If I did a Google search on Oak Street Properties, millions of results will be returned. Compare that to Atroosty Properties, which would return one result if I named an LLC that. The point is you want anonymity, which means you want to harder to find, not easier to find.

3. Your LLC name doesn't need to be your company name. You can have a DBA (doing business as) which is your company name and you can hold multiple LLC with different names. In fact I would argue your LLC should not be your company name when it comes to rental properties. If you scale, you will want multiple LLC, so locking your company name to a specific LLC doesn't make sense.

4. Banks don't care what your LLC is called. All they care about is your financial history of the LLC. Since the loan is in your personal name, the LLC will be creating no financial history.

5. Hold the LLC with a law firm that will mask your personal address. In some states, LLC owners and addresses are public record. This can actually make it EASIER for tenants to find your home, assuming you used your personal address for the LLC address. You can have a law firm hold the record at their address.

6. I would say @Matt Nico and the Rookie podcast are working off old information. It was true in the past with Fannie Mae and Freddie Mac backed loans, that you could not transfer to an LLC. Both of these mortgages can now be transferred due to rule changes over the last few years. Check your mortgage before you do it, but unless the mortgage is 5+ years old, I wouldn't be concerned.

 Joe you put things into words much better than I ever can...haha. Your explanations are great.

I was not aware of rule changes for Freddie/Fannie loans. But the same concept would hold true...what would be the point of transferring over? Why even give the bank an option to be able to exercise the due on sale clause? An umbrella policy should solve any problem of liability.

I agree, even though you can transfer, that doesn't mean there is any benefit. The new rules state you can transfer into a LLC if the mortgage holder is the primary LLC owner. If you want to refinance the property, you need to transfer it back to your personal name. There is really no point in my opinion, but the bank will not exercise the due on sale clause. Anyone should check with their mortgage company before transferring to an LLC to make sure it doesn't violate the terms.

[Sean Delagrange]

@Matt Nico pretty sure an investment property requires 20% regardless, at least in GA it does. And I’m seeing rates in the low 3’s, so I don’t think I’m missing out on a ton there.

[Sean Delagrange]

@Joe Splitrock thank you for this info! Got some research to do. I think my first move is speaking with a CPA...

[Joe Splitrock]

Originally posted by @Sean Delagrange:

@Joe Splitrock thank you for this info! Got some research to do. I think my first move is speaking with a CPA...

Speaking with a CPA is good in general for tax considerations, but has nothing to do with an LLC. In your situation, an LLC is a pass through entity. That means it makes no difference on taxes. You can have a business without an LLC. It is called sole proprietor and the taxes are the same as your single member LLC. An attorney can give you advice on the LLC and council you on how much liability protection it does or does not provide in your situation.

[Sean Delagrange]

@Joe Splitrock makes sense, thank you.

[Eric Goldman]

When it comes to LLC's I usually make it easy, lets say the prop address is 112 arch st. My LLC is 112arc LLC.

It does not need to be fancy. I have an LLC that I just use with fix and flips, that one is something better sounding. Check with your state and see what available.

[Sean Delagrange]

@Eric Goldman so you are saying you do one LLC per rental property?

[Eric Goldman]

@Sean Delagrange Some I group together. It matters if I take on a new partner.

I have clients that use the same one for every deal. I have some that use different ones. usually my more seasoned clients have multiple LLCs set up. 

[Sean Delagrange]

@Eric Goldman got it. I may try to find a good webinar specifically on this topic so I can have some foundational knowledge and decide from there. If you know of one that would be helpful! There’s always Google if not.

[Joe Splitrock]

Originally posted by @Sean Delagrange:

@Eric Goldman got it. I may try to find a good webinar specifically on this topic so I can have some foundational knowledge and decide from there. If you know of one that would be helpful! There’s always Google if not.

In a perfect situation you may have one per property, but the cost and effort involved in maintaining that many LLC is cumbersome. If the property is smaller, people usually group 2-3. If it is a bigger property like an apartment building, it would be a stand alone LLC. The important thing with LLC is that they need complete separation. Each LLC has its own bank accounts, separate accounting and you never want to mix personal with the business. That is part of the reason that having one LLC per property is cumbersome.

[Jared Kotler]

I always just do the property address. Each one I buy is in it's own LLC. It's annoying for sure, but each entity gets it's own bank account, credit, debit card, then transactions auto populate in whatever management software you use. After a while, the names get confusing so, 5325 Baltimore Ave. LLC. I have a triplex on Cedar St, so that's Cedar St. Apts. LLC. Soooo much easier that way.

[Alex Sonnenberg]

@Matt Nico I've been looking for a specific response like this for sometime from an investor. I've talked to CPAs and they are all about the protection of LLC. I've also wondered how you transition from personal to LLC with 2 years of history so a loan can be obtained. Perfect! Thank you!

[David M.]

@Sean Delagrange

https://www.biggerpockets.com/...

https://www.biggerpockets.com/...

This will sort of be a rehash of the above, but take a look at the above two discussion threads. For starting out, you really don't need a LLC unless you are investing with non-spousal partners. As previously mentioned, a legal entity such as a LLC is not eligible for a conforming residential loan. So, you'll have to use commercial lending.

"Frankensteining" your ownership, i.e. buying personally then quit claim deeding to a LLC, is fraught with problems. In the second discussion, I elaborate more on the issue of using your LLC as an alter-ego, in my opinion, which pierces your corporate veil. Furthermore, since the mortgage is still given under your personal name, you have a limited amount of limited liability. Remember, the LLC can only begin to provide protection / limited liability for whatever it owns or does.

From what I've heard, the Due on Sale is probably the least of your worries. Honestly, its a pretty simple solution --- just get another loan. if you can't get a loan, what in the world are you doing? Your bigger issue as as I touched on above is maintaining your corporate veil, otherwise this whole exercise of using a LLC is moot and you'll have a big surprise if you are ever sued.

As far as choosing a name, certainly using the street address is very common. However, it forces you into a more one-to-one relatinshiop. Thats fine for flips and multi-person investments (where the investors may vary). For branding purposes, while I'm not a marketing specialist but does it matter if you use "properties" or any other of your variations? Remember, you don't need the LLC for tax purposes (unless you ahve non-spousal partners). The tax deductions are the same.

Using a LLC as a management entity is commonly done. I don't know how often its done with TItle in your personal name. Otherwise, my layman's understanding is you would have a legal agreement created between the entity holding Title and the Mgt LLC. Then, the Mgt LLC would become the landlord and pass everything over. So, in the case of a lawsuit, the mgt LLC should be named....

Just remember that these entities have some cost. Besides the basic registration fee with your State (or multiple States since you should have the LLC formed/registered in the same State as the property otherwise it will have no legal standing), you should be maintaining a bank account, perhaps a credit card, and all the associated bookkeeping to go with it. If you are a single member LLC, at least everything is a pass through and you just keep filing more SchC for each LLC. If you are multi-member, the default goes to a partnership so a partnership return will need to be filed for each which spits out the K-1 so each member can file their personal returns. Its just more overhead for you if you do your own taxes or more accountant fees.

Depending on your investment directions, you would need to structure yourself with one static LLC. The Mgt LLC is one possibility. The other is to have your own holding or top level LLC that would be the member/owner of subordinate LLC's that would hold Title or be the Mgt LLC.

Anyway, consult a qualified professional or two. Also, consider if you really need or want a LLC. Even with the LLC you'll need insurance and possible an umbrella policy (which is harder to just have one if you have multiple LLC's). If you want branding, you could use a locally registered d/b/a. For an occasional flip, it may not be worth the effort (remember, flip profits are treated as active income subject to self-employment tax and the whole nine yards). Also, you MAY open yourself up to additional State mandated licensures or insurance by having the LLC's. For example, in NJ a business is required is to have Worker's Comp policy if it will, has, or may plan to hire employees OR subcontractors. I've ran into small business owners who have said that NJ has caught up with them and having had the policy for 5-10 years would have been cheaper than paying the fines that the State levied.

Good luck.

[Bob Norton]

@Sean Delagrange For my LLCs holding properties, I name them so that you can't tell what the LLC does or what it owns. Too many investors use names which tell me "I own a lot of property and all these companies are related to each other - please sue me."

[Bob Reinhard]

@Sean Delagrange

Greetings. No matter what you use, leave out the comma. It is confusing and not necessary. If you leave it out no one will ever screw it up.

Just my 2 cents.

Bob

[Jay Mersfelder]

Originally posted by @Matt Nico:

Originally posted by @Sean Delagrange:

@Matt Nico they have 2 properties each, lol. So maybe they are costing themselves money?

And if I purchase the property in my name with favorable terms, then move to an LLC, those favorable terms might not stick? Sorry for the questions, appreciate the help. Seems like I need to read up on it. Luckily the close date isn't until July.

 Sean,

They could be costing a lot of money yes. Let me answer it better:

When you put properties into your own name, you get an advantage of lower interest rates and better terms. So if you buy a property under your own name with a conventional loan right now, you would be able to get around a 2.5%-3% rate and 5% down payment depending on your credit. If you buy a property under an LLC right now, you are looking at a 4.5%-5.5% rate with 20% down. That 2%-3% difference is hundreds of dollars a MONTH that you dont get to keep, plus the extra down payment.

So while you are a small rental property investor, take advantage of the low rates and low down payments while you can!!!! I'm at 5 properties right now and they are all under 3.25% interest rate and in my own name. Soon, I will have to transition to 5% with my LLC, but I want as many low-rate loans as possible.

The LLC can be created now if you want. For reference, I created mine when I bought my 4th property. The way it would structure is when you do your taxes, you run the income you are making through your rentals through the LLC even though the LLC does not own them. This will give your LLC time to establish so when you need to borrow money and possibly get a company vehicle or credit cards, your LLC has 2 years of history.

I hope this better clarifies. I would find a good CPA and talk to them about this. Maybe in your state this wont work. As a reference, I am located in Florida. Feel free to respond to this with any questions or PM me in the future.

-Matt