Need advise on setting up an LLC

[Shannon Garst]

Any advice on setting up an LLC for our RE investments? Do we need to speak to a corporate lawyer or can we go the simple route of LegalZoom? Need to get it it done quickly for a hard money loan.

[Doug Smith]

Quote from @Doug Smith:

What State are you setting it up in? PM me and I can email you a laundry list of exactly what we lenders require when doing a bridge loan for a real estate investor. I'm happy to help. 

 Actually, for the good of the group I'll post this here. This is cut-and-paste from our doc request packet...

PREPARE YOUR ENTITY DOCUMENTS: The great thing about investor loans is that once we have the basic documents from the borrower, we simply need to make sure they are current and updated periodically. In a DSCR loan, the borrower is an entity like an LLC or S-Corp. We need to get the following information regarding the borrowing entity:

• ARTICLES OF ORGANIZATION: This is pretty easy to get in states like Florida. The articles are simply a form showing that the entity has legally filed in the state. 
• IRS SS-4 FORM: When you first sign up for your Tax ID number, you’ll get a letter stating what your Tax ID number is. We need a copy of that letter. Let me know if there is an issue getting it. Perhaps we can find a work-around.
• CERTIFICATE OF GOOD STANDING (aka Certificate of Status): I hate this requirement as it’s simply a way for the state to make money. Very few entities get this for themselves unless they are doing something like getting a loan, but it’s pretty cheap to do and can be done on line usually. It simply is something that states that the business is in good standing with the state authorities.
• OPERATING AGREEMENT OR BYLAWS: This is the document that usually throws investors for a loop as most LLCs (Operating Agreement) and S-Corps (Bylaws) don’t have these done at formation. Unfortunately, we need them for the loan. They will show who owns the entity in what percentages as well as who can sign on behalf of the entity. Sometimes a borrower will have their attorney draft them. On other occasions, they will simply get them with an on-line template through sites like Law Depot or Legal Zoom. We will, however, need a signed and fully-executed operating agreement or bylaws (depending upon entity type) to proceed.