Do I need a license to manage my residential (LLC owned) property in TX?

Question

Any Texas property managers / rental owners available to help?

I have not bought a property yet. In doing research I have learned that I may need to add a step to this process. I may need a Realtor license.

My plan is that my holdings LLC (LLC#1) will buy the rental property, then my forward op LLC (LLC #2) will be the managing company. If I am neither the property owner (#1 is) and I am just employee of #2, is a real estate license needed at any level?

Alis B. · Answer

As for financing through a new LLC, yes we are being offered ARMs by local banks and I'm not happy about adjustable rates (4.25% for 5 years with half origination is "best" deal so far),  so I'm creating my formula for what I can buy so if I stick with that, I should be fine. It will require me not to get trigger happy and buy out of excitement & emotion and rather buy out of panning. We are debt free and didn't get this way by accident.

Benito Lara · Answer

Hopefully I will not get in trouble for ask this question if I do I will delete I am wanting to know what software is everyone using to print out receipt for your customers when they make their rental payments thanks in advance

Benito Lara · Answer

@jim

@Jim Cummings okay, thank you for the information it was very helpful

Jim Cummings · Answer

@Benito Lara. As long as you are managing your own property you DO NOT need a real estate license. If you manage properties for someone else - you DO NEED a RE License in Texas. Other states may vary!

Benito Lara · Answer

So if I own personal property and put them under my business name which is a LLC business and I own the business I will not need a realtor license I’m asking because I’ve looked up on the Texas state laws it’s says you need one because it falls under real estate activity

Alis B. · Answer

Thank ya'll! Yes this information is helping.  This is a career change for me so I am glad to have a professional community to help me with basis 101 questions.

The reason for the layered LLCs is for protection. (We are starting out with one but will expand. I am looking for multiple long term SFR holds.) The need for LLC protection comes from my unfortunate personal experience with the legal world and the fact that at one time, I had everything unprotected (cash and an acre of land which was not connected to our home so it was not protected by homestead). Thankfully I came out with both.

If I have placed finances in a holding company, then they are not part of my personal funds. If a tenant gets legal with the rental then they can get legal with the management company. Yes they can add me to the suit, but there is nothing to gain as I'm a measly employee and have little in my personal account.  Another example, if we are in a car accident and damages exceed our insurance, we don't want to have the rental property in our name.

Because of life events, I am a the-glass-will-break-at-any-time-so-don't-go-around-barefoot-without-a-band-aide kind of person.

To restate: LLC#1 can own rental property and not need a realtor's / broker's license. Then LLC#2 can be the forward operating company that runs credit checks, screens tenants, and is the landlord and also does not need a realtor's/ broker's license. And finally, me, the member of both LLCs and the front person working with tenants, I do not need a realtor's / brokers license.

Lots of learning upfront but my goal is to have a well oiled machine. Thank you for your time. Keep your experienced advice coming! It's all welcome.

-Alis

Bill Gulley · Answer

Why 2 and why LLCs? buying one property really isn't a business advantage type thing, limited liability is mostly a myth, as to a license, which license? RE license, TX may let that slide on a pass through, other states may not, just a note for others.

If your LLC owns, you'll have financing issues.

Need to carry out some minor court action, an LLC will need an attorney.

Stacking LLCs will have admin issues for proper management of the company and under that same line of thought as it being a pass through, so are liability issues as to who is behind the door.

Best to get tons of insurance a hold personally on the first few properties, but there are other factors.

You may need to look at a business license with rentals or your LLC, one for each.

Off had suggestion, look to a Series LLC in TX, one cell may own, the LLC manages or another cell could manage. But, no need to complicate the world with one property, IMO. :)

Jon Klaus · Answer

I agree with Kevin, you do not need a license to manage your own property, even if it is in an LLC owned by you.  An LLC is a pass-through entity.

Kevin Tran · Answer

If you are managing your own properties, you do not need a license.  For example: I am a managing member of Abilene Royal Group LLC.  Abilene Group LLC acquired 3 properties and out source properties management to Abilene Property Management LLC Which I am also a managing member.  In this case I do not have to have a license but I do have to do two separate reporting at tax time.  Hope it answers your question.

Do I need a license to manage my residential (LLC owned) property in TX?

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