Quote from @Benjamin Aaker:
Hi Kevin, and welcome to the forums. I'll assume you are firm in your decision to set up an LLC. LLCs are about managing risk and they help you limit but not get rid of liability. I use them for all my rental properties and recommend people do the same, in general. I typically have up to 10 properties or $1M in each LLC. The biggest benefit is that losses from one are unlikely to spill over to another one. As you can see from @Bruce Woodruff's post, not everyone agrees with setting up an LLC. I don't want to speak for him, but many would say in your first or first few rental properties, you don't need to set it up. If your net worth is low, I agree. Otherwise, I don't.
If you are doing a single-member LLC (just yourself and no partners), you should be happy using Legal Zoom. I've done this in the past. Once. Do the lowest level and don't have them file for you. You can figure that out with the secretary of state. Since my first time, I set up my own LLCs myself. If you will be having any partners other than your spouse, I recommend a local attorney, because the risk is much higher. I estimate $1,000 in fees with a traditional attorney. It's worth it.
EINs are needed for each LLC, not each property. When you get the LLC set up with the secretary of state, you'll be able to go to the IRS website and apply for your EIN. It's easy and takes 15 minutes. And stupifyingly, it's completely free. Use the EIN to get a bank account set up.
Good luck and feel free to ask additional questions.
@Kevin S. this is the correct answer! The cheapest way to do this is to do it yourself. However, cheaper is not always better. And if you're dealing with legal matters, cheap is often more costly in the long run. I've set up llc's in two different states without using Google, zoom or anything else. However, I am not a lawyer and these structures have not been battle tested with lawsuits or anything like that.
My question is if you're just starting out, why do you need an LLC at all? You can still take all of the tax write-offs running your business as a sole proprietorship.
an LLC is not about tax savings, but it is about limiting liability, showing legitimacy to other business partners, and committing to yourself that you're really going to do this business and take it seriously.
however, if this is your first house, there's really no need to worry about all that. Real estate is hard enough without worrying about setting up llc's filing, corporate tax documents, setting up business bank accounts and on and on. There's value and merit to all of those things, but real estate is about finding good deals, funding them and operating them. Not about the nuances of accounting and business filing.
Don't get too distracted with this sort of stuff is you won't really make money and you'll hate this business. I say do whatever is relatively cost effective like Benjamin mentioned. Get down quickly and move on to the actual business of investing.
You got this. Good luck!
