Formation of an LLC (location, costs, DIY)

[Sean Matthews]

Hi there,

I am interested in getting passive income via real estate, ie. buying to rent. Nothing spectacular, just to make a start with some money that I've saved up. I read a few articles about opening an LLC in states like Delaware, Nevada and Wyoming as opposed to your home state.

I am based in Texas and initially look to start here, but perhaps later on to move out of state. I don't foresee excessive properties at this stage at all; so 2 questions I have:

1) Is it better to set up in Texas rather than out of state to minimise taxes and also ease of paperwork/etc. 

2) Can I form an LLC myself, using the state website? I see a filing fee of $300, but some companies charge up to $1200 to help set up? Can we do this ourselves?

Thanks

Sean

[Blair Poelman]

@Sean Matthews

Hate to be a negative nelly, but this is actually a very, very, VERY bad place to get the answer to your question.  Not that we don't know what we're doing, or that we're a bunch of idiots or jerks - but everybody has their own strategy for ownership that is directly specific to each individual person, and sometimes each individual deal.  One of our strategies may or may not (most likely not) work for you, as intended, in your exact situation.  It's a very specific thing that applies directly to you, your financial portfolio, your family finances, etc... and you're probably not going to find a simple solution to your question on any forum.

I wouldn't recommend any online services for any entity formation, other than going directly to the state that you're filing in. Personally I do mine in Utah, simply because it's cheap (if not the cheapest) to buy, and cheap to renew (and I live here).

Really the best thing you can do is contact an estate planning attorney that understands Real Estate ownership AND asset protection, as they go hand in hand.  It's absolutely worth the money you will spend to have a plan put together correctly the first time, rather than just throwing something together and then having to fix it all when you're 10 properties down the line.

I can give you a referral to a good guy if you're interested.  DM me.