All Forum Posts by: Mike S.

If you do business in Florida you will need to have your LLC registered in Florida. Same if you need to evict a tenant or answer to any lawsuit . So your LLC will have to be either created in Florida or foreign registered in Florida (but then you are paying two filing fee every year).

It is true that the single member protection for LLC has been weakened since Olmstead vs FTC. But you can either create a multi member LLC instead or have your single member LLC owned by a holding LLC in a better state like WY that will also give you anonymity.

On the asset protection point of view, if your operating entity is owning the assets it means that these assets could be more easily attached to a judgment against your operating entity.

It is often preferred to have an operating entity that owns no asset at all. The property are then owned by a holding entity that is completely independent.

As discussed above, do not use a quit claim deed, but a warranty deed instead.

Also to avoid the due on sale clause, you can transfer the property into a land trust where you are the initial beneficiary. The Garn St Germain act forbid any acceleration clause in that case. Later on you will assign the beneficial interest to your LLC.

You can maybe try to close directly into the land trust, I have seen some lender accepting it for closing, however I am sure that some won't accept it.

Also before someone else mention it, if you have multiple properties in the same state, the series LLC may be a cheaper option than multiple LLC in the same state.

Another factor that may become important is the cost of the structure depending on the states. You may have to create other smart entities to adapt the general principles exposed above to your situation. That is why, once you have educated yourself about the pro and con of all these solutions, you would need to talk to a specialized lawyer to discuss your plan.

It all depend where your properties are. As a general rule (but you would need to consult a lawyer for your specific case), you will want to have the LLCs holding the property(ies) in the same state than they are located.

LLCs offer two kinds of protection: inside protection (a liability starting from inside the LLC will be contained within the LLC), and outside protection (a liability starting outside the LLC won't propagate to the assets inside the LLC). All states have the same inside protection, however the outside protection varies greatly.

If some of properties are in states that do not offer good outside protection (ie charging order not being the sole remedy), you will then create a holding LLC in a state that has this great outside protection; This LLC will then own all the sub LLCs.

Another aspect also is that some states offer anonymity adding another layer of protection. By having an anonymous holding LLC, the only information listed in the sub LLC will be that anonymous holding LLC.

One of the best state for holding LLC that offers excellent charging order protection and anonymity is Wyoming.

In general a holding LLC (taxed as partnership or disregarded pass through entity) is tax neutral. The main interest is for asset protection.

C-corp and S corp (or LLC taxed as such) offer some interesting tax strategies.

Personally I hold all my rental properties in separate land trust, with each beneficial interest assigned to a single member disregarded LLC in the same state as the property. Each of these LLCs are owned by a WY holding LLC (partnership). In addition, I have a C-corp as a management company that is managing my holding LLC and all the properties. This management company is collecting all rents and paying for all maintenance and invoice each LLC for it. From this C-Corp I get fringe benefit pre tax and can decide to take a salary and/or contribute to retirements accounts.

I am not giving away my primary cell number and I still receive many spam calls and even some targeted calls that were probably populated from some leaked database. The numbers that I give away are voip ones that I control fully.

As I have a weird work schedule, working often nights, I am really pissed of when I am waken up in the middle of my sleep for these unwanted calls. I can't turn my phone off as I need to be reachable for some work related emergencies that unfortunately may come from unknown numbers. My voip numbers are however sent to voicemail when I sleep.

And the "take me off your list" option is most often a way for the data brokers to confirm that it is a working number that they will sell for a premium, attracting even more unwanted calls.

I understand that you can request an extension to file the 1065 for your LLC partnership. However, I am confused about the availability of an extension for the k1 filing.

If your partnership is waiting for k1 from some of its investments, how can you expect for it to file its own k1 in time for its members?

I have a triplex with pool in FL. Maintenance is not too bad (around $100 a month), however, the insurance is an additional two to three thousand dollars per year for the pool only. You will also increase your electrical bill for the pump (around $50 a month) and water bill for refill during summer.

If you have a heating system, the cost will also be higher.

You will need a self closing gate to access the pool and/or the unit next to the pool will need alarms on the doors/windows that can access the pool directly. You may have also some local additional ordinance, but usually they are for 10+ units.

Today I would avoid pool on small multifamily properties, and only consider it on SFH or large condos. But I would still consider it the numbers work.

I agree with @Costin I. against using a quit claim deed. Use a warranty deed instead. If later on you have a title issue, your LLC can 'sue' yourself and you can then turn back to your original title insurance. It will also keep a cleaner chain of title when you ultimately sell the property. The cost difference of a warranty deed vs a quit claim deed is ridiculous if any.

If you have bought the property under your own name, I would seem logical to have pay for it with your own money. When you transfer the ownership of the property to your LLC, you are making a contribution of it to the capital of the LLC that will then be recorded in its book. If the money was already in the LLC, then you should have bought the property into the name of the LLC directly, or you would have to do a distribution of the money from the LLC to you first. It is all a matter of bookkeeping, but it is really important to have it done properly to avoid piercing the veil.

For different reasons that I have explained in many other posts, in my own situation, I prefer to add in the mix a land trust that will directly own the property (ie the one on the warranty deed). Then you can assign the beneficial interest easily back and forth between LLCs and/or you later on if needed by a private document.