Attorney · Katy, TX · Member since 2014 · 397 posts · 215 votes
6y
How much does LegalZoom cost? I'm biased as an attorney but have seen lots of companies set up incorrectly by companies similar to Legal Zoom. If easy LLC setup, it's not like an attorney costs that much to do it.
Attorney · Katy, TX · Member since 2014 · 397 posts · 215 votes
6y
How much does LegalZoom cost? I'm biased as an attorney but have seen lots of companies set up incorrectly by companies similar to Legal Zoom. If easy LLC setup, it's not like an attorney costs that much to do it.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
6y
I don't think for the most part Real Estate or Legal Services is a do it your self sport for the majority of people. I see so many deals screwed up by do it yourselfers it's not funny. Some screw stuff up so bad that it is tough to fix, even when they call in the professions. Just saw a deal that probably cost the seller $75,000 on a deal because she tried to do it herself, where hiring competent professionals would have probably cost her only $5000-$6000. I think what she has done has also probably opened her to a lawsuit from her buyer as well as it has left them in a super difficult position (where they probably won't be able to sell the house the bought from her.) So they probably won't find that out until they try to sell it. That's not to say you aren't capable. You could very well be. Maybe you've worked in a law office doing this, or were the liaison for someone forming lots of LLCs or have some other legal expertise. A great attorney on your side can be a fantastic resource and is often a lot less expensive than you think. Here in Texas some of the great ones will set it up for just a few hundred.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
6y
@Kelly Wesley Agree local attorney as well. Do remember that most lenders do not lend directly to LLC's, or changing title to one can cause the loan to be called (hopefully the attorney will discuss that). But that's another subject.
Rental Property Investor · San Diego, CA · Member since 2020 · 26 posts · 32 votes
6y
Hi @Kelly Wesley! Depending on the state, I would actually recommend finding a CPA that is willing to create LLCs for you. It will save you money and also be easier to file your business returns at the beginning of the year because they're the most familiar with your business. I'd also narrow your search by finding someone who also does real estate investing.
@Kelly Wesley Always seek legal advise when it comes to your investments and money. You have to invest money to make money and that will give you long term peace of mind. Consider it a start up cost.
@Kelly Wesley Agree local attorney as well. Do remember that most lenders do not lend directly to LLC's, or changing title to one can cause the loan to be called (hopefully the attorney will discuss that). But that's another subject.
Definitely important to review due on sales clauses. There are limited exceptions to that for single member LLCs, also depends on your liquidity or ability to refinance as well.
Investor · Weatherford, TX · Member since 2015 · 43 posts · 40 votes
6y
I did a lot of research and ended up using ZenBusiness to set mine up. They had the best combination of services and price for what I wanted to do. Shop around. You need a lawyer if you are doing anything special, but setting up a simple single-member LLC can be done DIY if you choose. The advantage to a service is a good one will guide you through all the various required documents, and some will even help create your company "book".
I did investigate using a lawyer; for my purposes it was a lot of unnecessary expense for little extra benefit. BUT my LLC was extremely simple and I mainly wanted to use the service to provide the registered agent role. Shop around and read articles on the internet. There's tons of free information you can research before you decide. Sometimes a lawyer is the right way to go, sometimes a service is better, and sometimes DIY works.
Developer · Hamptons / Montauk, NY · Member since 2014 · 58 posts · 20 votes
6y
@Kelly Wesley Anything you would consider LegalZoom for, you might also consider ink file as they charge significantly less in many cases the process is clearer and the pricing more transparent.
anything you would consider LegalZoom for, you might also consider ink file as they charge significantly less in many cases the process is clearer and the pricing more transparent.
those solutions will certainly save you some meaningful money upfront, and it’s actually Very rare for them to be set up incorrectly as it’s quite simple and those businesses are absolute expert’s. It’s your deal documents that are tricky as they are different in every case.
Very rare for them to be set up incorrectly as it’s quite simple and those businesses are absolute expert’s. It’s your deal documents that are tricky as they are different in every case.
Sure an attorney can do a great job, but they are definitely substantially more expensive and in many cases overwork the matter, especially if multiple people at a firm are touching the file. It’s unfortunately baked into that business model. There are certainly attorneys who are well priced and who are efficient with their time, but quality is still difficult to assess without having first worked with them. So unless someone hands you a personal referral to someone who fits all the criteria, it can take some time to find the right person. So once you do hold onto them!
But quality is difficult to assess without having first worked with them. So unless someone hands you a personal referral to someone who fits all the criteria, it can take some time to find the right person. The once you do hold onto them!
A good middle solution might be a UpCounsel. It’s like the Uber of legal services. So you get the accessibility and the ease of the platform services referenced above, the expertise of actual attorneys, and a price that is probably closer to the platform services than full attorneys fees. You can very easily bit out your need. You also get to check reviews which is helpful when not sure who to hire. Overtime you can try a few people and then stick with whoever you like best. But ideally do you want to stick to one person so that they can also review deal documents. The continuity wheel drive efficiency. And with those savings it’s easier to afford reviewing everything and being thorough.
The continuity will drive efficiency. And with those savings it’s easier to afford reviewing everything and being thorough.
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
6y
I watched several youtube videos regarding setting up LLCs around 3 years ago. The videos were actually a great learning experience. The process was simple to set up a two member LLC in North Carolina, so I did it myself. Easy, Peasy, Japanezy (Brooks Hatlin / Shawshank Redemption).
Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
6y
There are multiple different critical steps when creating a LLC. I can brake it down into 5.
1/ Identify the correct structure needed. Based on your need, you will need to decide if an LLC is the right entity for your goal. Then you will have to decide in which state to open it. Should it be a single or multi member LLC? Do you want it member or manager managed? Do you need to use anonymity (nominee, trust, holding LLC)? How does it need to be taxed federally (IRS election) and by the state? The answers to all of these questions have a lot of ramifications for asset protection and tax optimization.
This step is the most important one and need a lot of understanding of asset protection and taxes. That is where a lawyer and accountant can really help you decide the best setup for your specific needs.
2/ Create the LLC with the state. This step is the easiest one and can be a DIY task. However, if you need anonymity and use a nominee or other obfuscation methods, you may not be able to do it yourself as you may have to use a third party. Also you will probably need a registered agent unless you can receive process during normal business hours. The creation steps are very simple and can be done online with most state. You can also ask your registered agent to do it for a fee.
3/ Create the operating agreement. Don't use the templates provided by some registered agents or found online. While they are legally sufficient for creating the LLC, they are not made for the specifications that you decided in step 1. In case of a lawsuit, that will be the most important document that will break or strengthen your position. An asset protection attorney is highly recommended to draft this document.
4/How to manage the LLC. If you don't use it properly, your LLC will probably be ignored by a court. You need to understand how to use it on a daily basis: proper resolutions, annual meetings, banking accounts and accounting practice. It is not difficult to do it yourself but you need to learn how to do it properly. If you have no experience, a lawyer and accountant again are your best counsels.
5/Tax reporting: your LLC may have some tax reporting to do. It will depend on the way it was structured and its tax election. You may have federal and/or state tax reporting. You can also do it yourself in some simple situations, but it would be wise to use the service of a professional accountant.