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Updated about 2 years ago, 10/16/2022
Company/LLC Name ideas
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!
Not sure about CA, but you could do a d/b/a... Otherwise, you'd have to form another LLC, and transfer everyhting over as if you were capitalizing it. But, you'd have to alk to an attorney about that... You must love those~$800 annual fees CA imposes...
Originally posted by @David M.:
Not sure about CA, but you could do a d/b/a... Otherwise, you'd have to form another LLC, and transfer everyhting over as if you were capitalizing it. But, you'd have to alk to an attorney about that... You must love those~$800 annual fees CA imposes...
LOL - you got that right $800 bucks a year to be able to look my LLC up on the Secretary of State website....just love it....you are right, I've used DBAs in the past. Unfortunately I don't think I can simply transfer my assets to another LLC because of the 1031 exchange - I may have to pay the taxes if I liquidate the LLCs
Hey Sean I really like the name of this -
XYZ Equities, LLC
- Rental Property Investor
- Boston, Massachusetts (MA)
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@Nick Rutkowski worst (real one) I ever heard of was "boat fund LLC". Very funny till you imagine someone getting angrier and angrier writing the rent check.
@Sean Delagrange
Hi Sean, great question. I personally love the capital format as well. I went with investments for mine and I haven't seen any issues as far as that goes. The biggest thing I've run into is making sure the investment property is in a desirable area. My first was in Bartlesville, Oklahoma and nobody knew where that was so that gave me issues. Nobody even brought up the LLC format and they were really willing to work together.
@Nick Shri this is interesting, thank you I’ll look Into this.
Also thank you to everybody else who has responded to this post, I honestly did not realize it would trend like this, I appreciate everyone’s guidance and tips!
@Sean Delagrange I have two LLCs. My "active" LLC (for fix and flips and wholesale deals) is Vested Capital, LLC. My "passive" LLC (for my rentals) is Vested Portfolio LLC
Originally posted by @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!
Alex,
Yeah the LLC protection is great but an Umbrella Policy accomplishes the same thing. My advice is to just use your own name for a while first. Once you actually have equity in a handful of properties or something to lose, then go for the umbrella policy and start putting homes into your LLC.
From what I have been told by financial people who know better than myself, LLC's need 2 years of tax returns to be able to really get loans and lines of credit, but some places give it to you after 1 year. I'm actually in that process now.
Happy Housing,
Matt
To my understanding, if you are using the LLC as income for obtaining a a conforming residential loan it will need 2 years of tax history. That is standard. However, if you the LLC is going to take Title, then you will need a commercial loan. You need to talk to a commercial lender. Just like the vast majority of real estate agents are really residential agents, the vast majority of lenders are residential lenders. They don't/can't handle originating a loan to a legal entity.
So, a LLC generally can give a mortgage with the owner/member providing a personal guarantee. That happens all the time, and to the best of my knowledge does not affect the corporate veil.
Otherwise, I agree if you want business loans or lines of credit you will need to build up a credit and income history.
@Sean Delagrange I see people naming the LLC by the street address (ie. 123 Abc St LLC), but they intend to put each property under separate LLC. Investments and properties are most common for real estate, I think. You can use DBA later once you decided to brand your company or came up with a better name.
@Matt Nico that was some good information, thank you for sharing. Just to get some clarification, I recently created an LLC with this idea in mind. I plan to purchase at least 3 properties in my own name before utilizing the LLC. In the meantime I was wondering how to go about establishing a credit history for my LLC. Did you open an account for your LLC and deposit the rental income to that account in order to establish a funding history for the LLC?
-Marla
Originally posted by @Marla Miller Chong:
@Matt Nico that was some good information, thank you for sharing. Just to get some clarification, I recently created an LLC with this idea in mind. I plan to purchase at least 3 properties in my own name before utilizing the LLC. In the meantime I was wondering how to go about establishing a credit history for my LLC. Did you open an account for your LLC and deposit the rental income to that account in order to establish a funding history for the LLC?
-Marla
Hi Marla,
Yes you have it exactly correct. I created the LLC after my 3rd property. I got an EIN (Employee ID number) and with that I was able to go to a bank and create a business checking/savings account. From there I got a credit card with a small-ish line of credit at first as my business was less than a week old. Use this card for everything business related and make sure you pay it off every month.
The 3 homes I own under my personal name as well as what I own under my LLC are all fed to the business account. Every bit of rent, security deposit, and expenditure goes through the business account. Nothing ever goes to my personal account anymore. Also quick tip: open 2 checking account. 1 has to be used to store security deposits.
Hope this helps.
P.S. Where in Spain do you live? I have been a few times. The food is absolutely incredible throughout the entire country.
@Matt Nico Hi Matt, thanks for clarifying, I wanted to be on a good track to make as little mistakes as possible. I didn’t think about 2 checking for that purpose, so thanks for that idea.
I’m living in Cadiz, Spain it’s a part of the Andalusian province. It’s beautiful here, with such a vibrant culture, it reminds me of where I grew up in Jamaica! The food is excellent and so fresh! I’ve been enjoying my time here in light of current events.
-Marla
Just make sure that if you do go down that route that you consult with a qualified professional or two. You need to make sure you aren't commingling your funds, thus piercing the corporate veil of the LLC. While you may have created a credit/income history for the LLC, but you will have eliminated the limited liability protection.
At a minimum, a LLC needs its own checking account. Only in very rare occassions can it do without. Rememer, you need to operate it as a separate entity. Good luck.
@Sean Delagrange
They will only ask for mortgage due if you transfer the deed to an LLC without getting a mortgage in that same LLC. With most mortgages the deed holder needs to match the mortgage holder. Read your Mortgage to see if you deed is transferable or not. Also it's a risk but doesn't always mean they will
Call it due. I wouldn’t risk
It myself but I also do everything out of my LLC's and always have. Only thing in my personal name is the house I live in.
@Sean Delagrange
I personally like equities Assest a and holdings. I think capital sounds like a lender. The others are pretty generic and basic. Property group sounds like management company. My company name is equities.
Good luck
Don't fret over it too much, you can always switch the name with a DBA (doing business as)
@David M.
Thank you David. I will ensure that I touch base with other professionals along the way, to get a better understanding.
-Marla
@Sean Delagrange What did you end up going with?
@Daniel Johnson LLC per property.
@Sean Delagrange always name it the property address. Nothing else. Makes get confusing on an income statement. Name your holding company something cool. Mine is Marchon Holdings. But I have 56th Street Apartments 1135 S 55th Street LLC, 5459 Cedar Ave LLC and 35 others. Name it the property address. You'll be thankful you did.
