All Forum Posts by: Nat C.

@David M.

It's not odd, it's one of the most common asset protection structures. Some people term it a double LLC. Basically an LLC owned by an LLC.

Your name won’t show up on the state records so it’s an excellent way to keep your assets anonymous.

@David M.

I was trying to simplify things by not having an LLC within an LLC but as I can't ascertain from the Florida Division of Corporations if this would be permissible and based on the thoughts of my superior colleagues on here, I have reconsidered this structure.

I can’t get any personal loan anyway. The only loan I’d ever get would be commercial once I set up a company structure.

@Klemens N. Huynh

Thank you for the elaboration.

Did you run the structure by an asset protection attorney before implementing it?

I’m going to study your setup further.

One potential problem I see is that tenants are paying rent to your personal name. To me, that pierces any corporate veil and makes you liable. Just my personal concern.

@Klemens N. Huynh

Thank you for sharing this.

How did you come to decide on this structure? Was it from accumulated self-study or did you see the exact structure somewhere and replicated it?

Can you please elaborate on how the properties can be within the WY series LLC without paying the CA franchise tax and how they're not doing business in CA?

I have been trying to get a hold of the Florida Division of Corporations to obtain an answer from them but they never answer their phone. Argh

 You are the man who know the most, Jerry. I have always enjoyed reading your posts. 

Here are my thoughts on your reply. 1. The Florida operating company is set up to take the hit of any lawsuits. They're the one with all the leases with tenants and contractors with contractors etc. All leads trace back to the FL operating company.

If anyone filed suit on the WY holding company, they would need to serve the address on record on the property appraiser register.

It's of course, not about saving $50! You yourself wrote in a previous post that the paperwork and ongoing upkeep of managing multiple LLC's would do your head in. My proposed idea sees 500k in equity being in each WY LLC. These LLC's are non-operational and receive no income or losses, so paperwork almost none, apart from the $50 annual renewal.

The FL operating company is the one with deals with ALL the money, so the accounting is very simplified.

This structure doesn't take into account properties with a mortgage. None of my properties have a mortgage and it's not an area I'm familiar with.

@Ryan Hazelwood

Purchased first house at 21. Now 34 and own 4 houses, 6 multi-family and 1 commercial building

I've read conflicting information about this issue, so I intend to check with a RE attorney. Does anyone here have insight into this matter?

Can a Florida property be owned by a WY LLC without registering as a foreign entity if the asset is static and non operational?

The property would be rented out by another FL LLC operating company. This local LLC would deal with tenants, contractors and all the operational side.

The house itself is therefor not doing business in Florida. This is obviously an asset protection strategy, I am just trying to make sure there are no tax or legal consequences.

I understand the other option is to have the house in a FL LLC, which is owned by a WY LLC. The state filing fees and annual fees are much higher with this second option. If you own one property, it's fine but if you have dozens pf properties, the annual cost goes into the thousands.

Any feedback would be appreciated. 

@Paul Jovaisa

Yes foreigners can use the 1031 however they’ve recently changed the rules.

You need to do a simultaneous exchange if you want to avoid FIRPTA.

If doing the regular or reverse 1031, you will still need to deal with FIRPTA.

@Christoph Krekeler

I would look for a US citizen to partner with and then undertake whatever RE activities you please (fix and flip or BRRRR), with you being the silent partner on paper. Have that written in your operating agreement in case you need to present it to the consulate or Homeland Security to prove the passive nature.

If that goes well for you, you could maybe look into the E2 visa in the future with some sort of RE business.

I see you’re in North Charleston, which is interesting. I’m sure you’re aware North Charleston was ranked as having the highest cap rate for RE returns in the US recently.