LLC Tips for Real Estate Investors

[Larry Nielsen]

Hello, looking for tips on LLC formation for real estate investors. Can I use a previously existing LLC? Would I need to re-write the operating agreement if it was not previously used for real estate? Should I start a new one? I have heard so many things... 1 property per LLC or 10 properties per LLC etc... one LLC per state...

Looking for advice from investors already using LLCs for rental properties. I appreciate anything you can tell me.

[Larry Nielsen]

Quote from @Scott Mac:

Well Larry,

You are in over your head on this LLC thing.

It can be pretty complicated from a tax standpoint or it could be rather easy from a tax standpoint to implement.

There are so many choices out there that you need to make, and you have to look at what you really trying to do with it, which is asset protection for your personal assets most likely.

There's also the issue about having an accounting system in place for the LLC and using the accounting system when you prepare your taxes.

Some investors, (and some attorneys are comfortable advising) running without an LLC for some people and instead having an insurance policy in place to cover most likely scenarios of paying.

Your personal tax situation, as well as your personal asset situation will weigh into this decision of how to set up the LLC And what to include in the operating agreement.

You will also have the need to have annual member meetings and annual manager meetings for the Shell (slang for the LLC).

Talking to your real estate tax person and an asset protection attorney and then making your decisions is a reasonable way to go about this task.

Also know that some LLC setups can make it very hard to borrow, which is something to talk to lenders about before you make your decision on what to do.

Good Luck!

How to have a single member LLC members meeting:

https://www.youtube.com/watch?v=U6WnUFLfg9Y

Thank you for this information Scott. Looks like I have some more research to do here. I appreciate you taking the time to reply with this. Also, thank you for the informative video. 🤣