Setting up to scale - Series LLC in Missouri

[Melissa Kaatman-Boettge]

Hello, 

I am working on setting up an LLC to purchase our first investment property (a 4-unit). I have read about series LLCs in Missouri, and I think that is the direction we will take. Since this is our first investment property, how exactly should the form be filled out? We also have a single family that we are currently living in, and will turn it into a rental while house-hacking in the 4-unit.

My questions:

1. Should the main llc hold the first property we purchase or does every property go into a series "pocket"? 

2. Is there a correct way to name each pocket? Would I just use the llc name and add the street name at the end? ie: Smith LLC. Main st.

I am hoping this is something I can figure out myself and get filed. If you think it's absolutely necessary for me to have an attorney help, please advise. Also, recommendations for an affordable attorney in Saint Louis are much appreciated. I got one quote for $800 to set up the llc for us, please tell me that's overpriced! 

[Kevin Spring]

Like many people have suggested, asking an attorney would be the best option. Attorneys can get expensive but it is important to do it right the first time.

I set up an LLC years ago for a business that never made it off the ground. I set it up through Legal Zoom and never had any problem with it. I am in Texas so there are not many onerous requirements for an LLC here except the filing of a tax statement to the state every year.

After learning about a Series LLC I was intrigued about convert the LLC I currently hold and converting that to a Series LLC. Right now my LLC is not doing anything so I could just use it for my current needs in real estate investing. To do the amendment paperwork myself it would costs about $150. That is not very expensive but how do I know if I do it right or wrong? The government body that I would turn the forms in don't proofread and check my work. They just accept the paperwork and file it. If I ever have a lawsuit, it is the plaintiffs that would point out all the mistakes I had made and the judge would decide if they are correct or not.

To form a Series LLC in Texas, the Secretary of State says "the language required by section 101.602(a)(1)-(2) of the Texas Business Organizations Code must be included in your certificate of formation and company agreement, and you must maintain separate records for the assets of each series"

I think it is a smart move to set up a Series LLC. One reason is that once you have one then you don't ever need to set up another LLC as long as you operate in the jurisdiction of that state. There is a caveat, only do it if you can maintain separate records and it is set up right. Maintaining separate records may cost you more for accounting and management services. To set it up right, I think one of the first steps is to find a competent real estate attorney that can set it up for you instead of using Legal Zoom. Yes, Legal Zoom is cheaper but the purpose of a Series LLC is to protect one property from the liabilities or legal problems of another property. Making a small mistake to save a few hundred dollars may cost you thousands of dollars in the future.