LLC

[Hermilo Garcia]

Hello everyone,

I have been reading books by Robert Kiyosaki lately, and he talks a lot about creating your own LLC to protect you assets.

Should one create an LLC before purchasing property, or after?

Any advice on LLC's is appreciated!

Thanks.

-Hermilo Garcia

[Joe Villeneuve]

Originally posted by @Emily B.:

@Joe Villeneuve can you share an example of how this might work? Or has worked for you?

Sure @emily. We form an LLC. It could be the day before, or years before. The key is it is when it is formed, the only purpose is to make offers and to hold ONE property. We have a program for doing this we instituted to make it easy too. Standard docs and distribution breakdowns based on the "type of partner" each member of the LLC is, and what their roles are within the LLC.

There are essentially 3 Partners:

1 - Cash Partner:  Responsible for putting cash into the deal at the beginning.
2 - Credit Partner:  Responsible for getting any leveraged financing...specifically the refinancing to get all the cash back that the Cash Partner put in.
3 - Management Partner - Responsible for everything else, from the finding and analyzing the deal, through closing, to managing the project to the exit strategy.

All three partners are on the Articles for the LLC from the start. Since the Credit Partner is a part of it from the start, when financing (refi) is required in 2 or 6 months, the title is quit claimed to them before application for financing...and right back into the LLC before the "ink is dry". The financing is in the name of the credit partner, but the title is in the name of the LLC. As long as the credit Partner remains a member of the LLC that holds the title, all is well with the world...in the eyes of the lender.