Quote from @Martin M.:
@Arron Paulino
Hey Aaron nice work getting started on investing. Search the bigger pockets forums here and you'll find a lot of useful information around LLCs. Many of the questions you have might've been answered in other posts. It's also a good way to get better educated on LLCs.
Here's some of the basics....
The legal side of LLCs and how they elect to be taxed or not taxed (google pass through) are two completely separate topics. Don't comingle these two concepts, legal and taxes. They're typically not one in the same.
In most cases (not all), especially when just starting out, you want your properties in an LLC that's in the same state as the property. If the property's in Idaho... you want an Idaho LLC holding that property and so on.
You apply for an EIN for the LLC. think like social security number for the LLC that you pricier to a bank to open a bank account for the llc.
Insurance coverage is more important than LLCs for your liability protection.
Keep it simple. Talk to an attorney about what you actually need.... maybe google LLC attorney or business attorney in your state. Meet with them and show them the properties that you have, and what you envision you'll be with your properties 1 or 2 years down the line. Ask what they'd recommend. Yeah it'll cost a few bucks to start but you'll be doing it right.
You want to start with an attorney that knows your specific state, (assuming that's where the properties are) because even though LLCs look very similar across all states, the laws around them are not identical across all states. There can be important differences from one state to the next.
Google real estate cpa in your state. ask them, based on your real estate model, how should the LLCs file federal taxes... none/pass through, s corp and so on. Hope this gets you started.
Good luck!
Thanks for the reply. I'll continue to do my research on the forums and educate myself.
I think I primarily need the LLC in order to get funded for real estate deals. I've just been buying personally so far and gotten insurance for coverage but have come to the point where I need to scale and get more funding instead of using my personal funds.
I can definitely do that in terms of holding an LLC in the state where the property would be. I've heard of getting one in Delaware or Nevada for better terms. But maybe that's not true for my case?
How does one obtain an EIN for the LLC? I've seen these around but never got to it.
I totally agree about insurance and getting them right.
Looks like I'll have to connect with more attorneys and CPAs so I can structure terms correctly and get taxes in order. I appreciate the input!
