Does Your LLC Operating Agreement Contain Similiar Errors?

The other day I received a LLC operating agreement from a prospective client, who I will refer to as Susie, for review. This person had attended an Armando Montelongo "You Will Have to Flip Your Own House After You Mortgage it to Pay for my Courses Seminar."

At this seminar the speaker told Susie that in addition to spending $35,000, she must set up a Nevada Corporation and Nevada LLC for her real estate investing for the "Today Only" price of $6,500. Susie shared with me her LLC operating agreement and asked what I thought. Here is my response:

1.    You overpaid for the the form document you received. - Mistake #1

2.     Why would you set up a Nevada LLC to hold Ohio property? It must be filed in Ohio thus, the Nevada benefits are blown. (Wait this is a form document so you didn't speak with an attorney. One size fits all.) - Mistake #2

3.     Your LLC was set up as a partnership for tax purposes but you do not have partner. - Mistake #3

4.     Your LLC agreement will not allow you to contribute encumbered real estate unless you notify your lender or pay off the loan. (Armando must assume that all of his students buy for cash and the only debt they have is the 3 credit cards used to pay for his course)- Mistake #4

5.     Your LLC agreement states it is protected under a "Sole Remedy" statute in Nevada. No such statute exists. - Mistake #5

If you think your plan might contain similar errors or you would like to learn how to structure your investments with entities, then consider attending my upcoming Workshop for real estate investors in Anaheim California.  I, coupled with a CPA and another attorney, will dive into many issues guaranteed to improve your planning.  Here is a link to a video wherein I am discussing what will be covered at my 2 day event.