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All Forum Posts by: Kevin S.

Kevin S. has started 23 posts and replied 390 times.

Thanks for the response.  I would like to DM or speak over the phone or email directly.  

Post: Questions on LLC

Kevin S.Posted
  • Posts 394
  • Votes 238

Very helpful response.  Thank you, Jake.

Is it true that tax deduction stops at certain income level?  Does a high income earner loose deduction completely or is it a tiered system?  Thanks.

How long have you been doing it and in what market, Andrea? What type of properties do you get the best results? SFR or duplexes, number of bedrooms/bathrooms preferences, location and demographic criteria. Interested investors can focus on these properties to buy. What type of ROI have you gotten for landlords in the past? Thanks.

Hello everyone. I am a small business owner and already have an accountant for past 25 yrs. I am new to RE investment and starting out. My question (probably more relevant to those in similar situation of being small business owner getting into REI) is : Are 'regular' accountants well versed in RE investor needs? If not, do you use 2 accountants? Do I transfer my regular accounting to the one with RE experience? How do I avoid paying 2 accountants? Do RE accountant (if there is such) work with regular accountants? How do RE accountant differ in service and fees? Anyone been down this road? TIA.

Post: Questions on LLC

Kevin S.Posted
  • Posts 394
  • Votes 238
Quote from @David M.:

@Kevin S. You can certainly do whatever your want.  Like I said, lenders are sales people by profession.  They want/need to sell you whatever they have.  Piercing the corporate veil is a legal matter about "facts and circumstances."

Just like accoutants can help one find more deductions, but that can pierce your corporate veil. Its a legal matter, not an accounting matter directly.

You won't "know" that your veil is pierced until you are sued.  

If you want to get that personal loan, go ahead. Then, just figure out how to NOT co-mingle funds. The loan needs to be paid from your personal account, not the LLC. You claim the interest, not the LLC. The loan is now in your name. Now you need to generate even more paper. Oh, and the loan isn't under the auspices of the LLC...

Good luck.


Thank you David. From what I gather until now is I need to get a LLC ready and QCD (transfer) to LLC after closing. Using LLC get EIN, open a bank account and do all transactions using that bank account. Repeat with property 2,3,4 so on. Without legal zoom any one knows what state department typically handles setting up LLC?

Post: Questions on LLC

Kevin S.Posted
  • Posts 394
  • Votes 238
Quote from @Stuart Udis:

It's wise to purchase your real estate through an LLC but there is a misconception owning real estate reduces the risk of a lawsuit. That is not accurate. 99.9% of the personal injury attorneys are chasing the insurance money not your personal assets and as it's an easier form of collection. Therefore they are going to file the lawsuit regardless of whether they see your property is owned by an LLC or is in your name. Just because these attorneys are awarded a judgment against you doesn't necessarily mean they are going to see the proceeds whereas an insurance carrier will pay out on a claim.

Nevertheless, keeping yourself personally out of the equation is in your best interest. I would say the biggest benefit of owning real estate as an LLC is keeping yourself personally clear of claim history. Even if claims brought are frivolous or inconsequential, its public record and something you have to explain away to lenders etc. So yes, own your real estate in an LLC, but more importantly make sure you carry appropriate levels of insurance and prepare your operating agreement and operate your LLC like a business. This means no co-mingled funds, hold meetings if that's what your operating agreement requires etc. otherwise you could theoretically open yourself up to piercing the corporate veil (although this is generally difficult for a plaintiff's attorney to do).


Thank you Stuart. It comes down to having LLC is generally and overall better than not having.

Post: Questions on LLC

Kevin S.Posted
  • Posts 394
  • Votes 238
Quote from @Benjamin Aaker:
Quote from @Kevin S.:
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.


Thanks for the welcome, Benjamin and even more so for your valuable and lengthy response. If you didn't use Legal zoom can you tell me how you did it by yourself? I do not have partners, just my wife. Is it a good idea to include kids? How do I link EIN to the LLC? Is it part of the EIN set up? Just to confirm what you said: Set up LLC first, then get EIN. TIA.

The answers here are pretty technical. I'm not an attorney, but I can give you my experience. I did use Legal Zoom for my first LLC. I didn't include my kids. Once I got the LLC set up and registered with the secretary of state, I used that documentation to get the EIN.

 Thank you.

Post: Questions on LLC

Kevin S.Posted
  • Posts 394
  • Votes 238
Quote from @Timothy Howdeshell:
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!


Hello Timothy. Appreciate your feedback. Since you back what Benjamin said and he uses LLC for all his properties then I plan to follow suit. Is it a bad idea to have properties in your personal name (instead of LLC) if you are a high net worth individual? Open question for all. Thanks.

Post: Questions on LLC

Kevin S.Posted
  • Posts 394
  • Votes 238
Quote from @David M.:

@Kevin S.

Lets see... The first thing that sticks out in my mind is your plan/desire to get the loan under your name... If you are using a LLC to take Title, then the LLC should be getting the loan, NOT YOU. Don't work with a residential lender, and find a commercial/"non-residential" conforming loan. You need to also learn how to operate the LLC correctly to protect its corporate veil. Its a legal matter, so really pretty much only an attorney would have at least a fiduciary responsiblilty to you / LLC.

As mentioned, there is the debate about investing personally or with a LLC. I'm in the camp where you don't necessarily need it, unless you are investing with non-spousal partners or commercial property (anything more than 4 units).

Check into how your taxes will be filed.  With two members, you are required to file a partnership, I think form 1065, which spits out a K-1 so you can file your personal tax return.  I thought in some states a husband/wife llc doesn't.  But if you do, more complication/costs.

if you set up a single member llc, in some states it could just take you a few minutes... You don't need an operating agreement to start (its just you...), but you'll need something later for the loans. I THINK a few states require you to mail in paperwork. But, i thgouth most are like NJ where I just go online and and form the LLC in 5-10 min, and pay the filing fee with a credit card. The entity formed and the entity number, I can go to the IRS website and filed for the EIN. Even though I don't have employees, its good to have the EIN since its like the SSN for the LLC. At least in NJ, with just the formation info I can then get the bank account. I hear some places want the EIN as well.

Ease of piercing of the corporate veil is also argued back and forth. So, the "threat" of suit or if some "ambulance chasing" attorney going to back off just because they see a LLC and not worth their time to pierce the veil. Its really up to you. If you are really afraid of frivolous suits, then I guess get the extra layer of protection, but learn how to use it properly.

Hope that helps.  Good luck.


Thanks for your input David. My lender told me I can buy with conventional loan under my name and transfer to LLC 'after' closing. Some one here suggested to buy more insurance instead of getting LLC.