How did you form your LLC? Lawyer? Legal Zoom? etc

Question

Hello everyone. I would like to get an LLC started but I'm not sure where to start. I thought about legal zoom because they may be less expensive than a lawyer.  How did you get your LLC started?

Thank you!

Account Closed · Answer

@Tabitha Johnson We have our own family "consigliere" for every country we invest in. I would recommend getting it done with lawyer. Make some relationship with the lawyer as well. Keep in touch with him, you never know when you might need him. We always put properties under series LLC like @Kyle R. said. It saves you in the long run. We have our own full-time lawyers, so we get the documentation done by them. Make sure to not put your personal address as the physical address. Some areas allow PO Boxes, while others don't. We always put the physical address as the lawyer's office address, saves us a lot of hassle.

Hope I helped.

Tabitha J. · Answer

Account Closed Thank you!

Kyle R. · Answer

The LLC is owned by a trust and the address listed is my lawyers. I'm listed as a representative of the LLC as per NC requirements and used my personal address for it.

Christopher Charles · Answer

@Tabitha Johnson

Mycorporation.com is pretty great. Depending on how much you plan on making whether that be 100k per year or 100k per month. I'd recommend being sure to choose the S election when you form. You'll have to set your self a "Reasonable" Salary but it'll save you from having to deal with the dreaded double tax that comes with a sole proprietorship and flat out C corps.

As for your rental units and whether you should put them all under one or not you'll have to get more understanding, what I mean is, You'll have to think back to the whole purpose of even forming LLC besides tax benefits and being able to claim ownership to a company lol.Its purpose is to protect YOU and your personal assets from a lawsuit in the occurrence a lawsuit be filed against you as a result of an accident involving one of your tenants in your properties. We all know that if you put rental property under your personal name and an accident happens that results in a lawsuit you can be sued up to the full amount if they ( Your tenant wins) And if you don't have the cash on hand will have to liquidate your other investment assets and even personal assets as well to set it right. Now if you place those properties under a llc...say a tenant does get into an accident resulting in a lawsuit. That individual would only be able to sue you up to what is placed in or under that LLC. Make sense?

Depending on your market, the quality of tenant, and stability of the Investment property you plan to purchase, you'll have to gauge how comfortable you feel with loading however much value in property into a particular llc. Some say up to 100k per LLC, others just throw every new investment deal they get into a new one. Of course, both routes have there pros and cons,  the oblivious been simplicity, less cost, and less paperwork for the first, yet more liability protection for the latter.....But ultimately you have to decide that one.( Recommend finding an Investor savy CPA to sit down with you and go over everything)

Laaaastly as for the PO BOX ..question you tell us. Do you want to be found by other investors and or solicitors? Or would you rather keep that a secret. Or course Everything can be found online if you look hard enough. But typically with a Po Box, an angry tenant, Irritating Investor or once you start making the big bucks and become Accredited....thats when it gets crazy....all types of charities, organizations, and beggars could be knocking directly on your door. Interrupting you and your families time.

Hope I helped,

Scott Smith · Answer

Hi @Tabitha Johnson any address you list on a deed is public information and you will want to use an address that does not go back to you directly. P.O Boxes are often not allowed, so we recommend either UPS address or the attorney address to be listed for the trust.

Ryan Murdock · Answer

@Tabitha Johnson If you're going to be in this business for any amount of time you will likely need a trusted attorney to lean on every so often. No better opportunity to start building a relationship with one than when you need to set up an LLC. It might cost you a few more bucks than the discount dot com but unless you are already extremely well versed in real estate law and asset protection I'd first seek advice from a real attorney who is. Ask around for referrals from other investors or just cold call law offices in you area to find a good fit.

Tabitha J. · Answer

@Kyle R. Did you use your personal home address for the LLC?

Kyle R. · Answer

The series LLC structure enables you to house multiple properties in one LLC but not risk all units if a lawsuit were to occur. Each property is held within its own series separate from other properties in the LLC. Property A is in series A, property B in series B, etc. Think of each series as a separate LLC.

In terms of address, I had to use a physical address and not PO Box. However, each state has different requirements so I can only speak for NC.

Tabitha J. · Answer

@Kyle R.  I plan to have several rental units. Can I put them all under the same LLC? Also, When registering an LLC it asks for an address. Should I get a PO BOX or use my home address?

@Terry Miller Thank you!

Terry Miller · Answer

Have your credit card/debit card ready to pay the fee, and start on their website:

https://www.njportal.com/DOR/BusinessFormation/CompanyInformation/BusinessName