Help with starting my LLC's

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Help with starting my LLC's

Eric Willis
Member since 2021 · 3 posts · 2 votes

I'm wanting to form a Wyoming LLC as a starting point for my RE investment company. From there I plan on getting a Texas LLC and use the Wyoming as the owner of the TX one and others that follow. I've heard this is the best way to structure it so I have protection and so I'm not trying to do different RE strategies in the same company and end up with a mixed up mess.

As far as the details go, I have a few questions:

1. Would it be a foreign LLC, and how would taxes work if it was only used as a "holding company" to hold my Tx LLC? I read it would be taxed as a C corp since it's a foreign LLC. Not sure if this would apply to me since I won't be doing business in it...

2. How would taxes work with both? Would it be a complicated mess? I would get a registered agent for the Wyoming LLC but I'd rather not hire everything out when I'm just starting. I'm in college for a business degree so I know a bit of accounting and I can stay organized with paperwork and such.

3. Are there any problems with this structure?

-Thanks

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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
4y

@Eric Willis how many properties do you have at this time? This is a pretty elaborate structure. I would make sure you have the right insurance, an umbrella policy and then even see if you can put your properties in LLC's.

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  • Jordan MoorheadBusiness Member
    Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
    4y

    @Eric Willis how many properties do you have at this time? This is a pretty elaborate structure. I would make sure you have the right insurance, an umbrella policy and then even see if you can put your properties in LLC's.

    [email protected]512-888-9122
    The Moorhead Team5142 Reviews
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  • Eric Willis
    OP
    Member since 2021 · 3 posts · 2 votes
    4y
    Quote from @Jordan Moorhead:

    @Eric Willis how many properties do you have at this time? This is a pretty elaborate structure. I would make sure you have the right insurance, an umbrella policy and then even see if you can put your properties in LLC's.

    Thanks for the reply! I don't have any properties yet, I just want to start everything the right way. 
    1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    4y
    Quote from @Eric Willis:
    Quote from @Jordan Moorhead:

    @Eric Willis how many properties do you have at this time? This is a pretty elaborate structure. I would make sure you have the right insurance, an umbrella policy and then even see if you can put your properties in LLC's.

    Thanks for the reply! I don't have any properties yet, I just want to start everything the right way. 

     worry about all of this later as Jordan mentioned. Start with a property, getting good insurance on it and seeing how it goes from there. 

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    1Reply
  • Eric Willis
    OP
    Member since 2021 · 3 posts · 2 votes
    4y
    Quote from @Chris Seveney:
    Quote from @Eric Willis:
    Quote from @Jordan Moorhead:

    @Eric Willis how many properties do you have at this time? This is a pretty elaborate structure. I would make sure you have the right insurance, an umbrella policy and then even see if you can put your properties in LLC's.

    Thanks for the reply! I don't have any properties yet, I just want to start everything the right way. 

     worry about all of this later as Jordan mentioned. Start with a property, getting good insurance on it and seeing how it goes from there. 

    Thanks for the advice. I think I will do that
    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    4y

    I agree with the others. This is sort of like shopping for $600 basketball shoes when you haven't even determined if you like to play basketball or are any good at it. There are other things that are far more important like learning the basics of dribbling, passing, play up some free throws, we're finding other people to play with.

    The protections provided by an LLC are beneficial, but knowing and obeying the law will offer you far more protection than an LLC. Proper application screening will protect you more than an LLC. Having solid policies and procedures in place for unpaid rent, lease violations, or security deposit disposition will protect you more than an LLC.

    Here's the reality: can anyone name one single investor that was successfully sued for a large enough amount that they lost the investment property? I've been on this forum since 2010 and haven't found a single case, except for a few slumlords that were blatantly violating the law over and over again.

    My properties are in an LLC primarily because I want anonymity in my small town. My real protection comes from obeying the law while treating people honestly and fairly.

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