All Forum Posts by: Turgut Oz

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Quote from @Jackie Linne:

Quote from @Turgut Oz:

I have talked with two different attorneys. I got opposing opinions on below and wanted to get what others know (or do) on the subject. Please note that this is for a Texas Series LLC.

1. Imagine you have a Texas Series LLC (parent) with five cells in it (children). Does each of these cell need a separate checking account for a reasonably good asset protection? One attorney said it is a must, whereas other said confidently that it is completely unnecessary. He did not oppose to it, he just thinks only the parent series LLC having one account is enough.

2. I inquired about the possibility of a two-company structure: 

A traditional LLC that is the public face of the activities (collecting rents, paying contractors, etc.) and managing the Series LLC with each property in once cell in it (in this case, Series LLC is serving as a holding role).

Again, one attorney said that would be much better than a standalone LLC and that is recommended approach, and the other said it is waste of time and money since there are some requirements from Texas Real Estate Commission, which is requiring being a licensed broker in the state to operate in the managing LLC.

So, just want to hear what other Texas investors are doing when it comes to series LLCs regarding these issues. 

Thanks

Hi there. I'm also trying to figure out the best way to structure my series llc (in Ohio) and I'm getting both perspectives.  I'm leaning towards separate bank accounts to be safe. Question for you: are getting a separate EIN for each of your series?

I have set up a Series LLC in TX. I decided to go with one bank account for the parent LLC. In Texas, if transactions are reasonably distinguished among child cells, one does not need separate bank accounts per a few attorneys' advice. I have only one EIN for the parent LLC.

Hey Turgut,
If you don't mind DM'ing what bank you used. I checked online and generally folks say Bank of Texas or local credit unions.
Thanks!

I used Chase for a Business account. They give you a credit card and you can use Zelle with LLC. However, I am not transitioning to Baselane to streamline each property's expenses. Seems promising right now but I can share more as I experience it.

Quote from @Jackie Linne:

Quote from @Turgut Oz:

I have talked with two different attorneys. I got opposing opinions on below and wanted to get what others know (or do) on the subject. Please note that this is for a Texas Series LLC.

1. Imagine you have a Texas Series LLC (parent) with five cells in it (children). Does each of these cell need a separate checking account for a reasonably good asset protection? One attorney said it is a must, whereas other said confidently that it is completely unnecessary. He did not oppose to it, he just thinks only the parent series LLC having one account is enough.

2. I inquired about the possibility of a two-company structure: 

A traditional LLC that is the public face of the activities (collecting rents, paying contractors, etc.) and managing the Series LLC with each property in once cell in it (in this case, Series LLC is serving as a holding role).

Again, one attorney said that would be much better than a standalone LLC and that is recommended approach, and the other said it is waste of time and money since there are some requirements from Texas Real Estate Commission, which is requiring being a licensed broker in the state to operate in the managing LLC.

So, just want to hear what other Texas investors are doing when it comes to series LLCs regarding these issues. 

Thanks

Hi there. I'm also trying to figure out the best way to structure my series llc (in Ohio) and I'm getting both perspectives.  I'm leaning towards separate bank accounts to be safe. Question for you: are getting a separate EIN for each of your series?

I have set up a Series LLC in TX. I decided to go with one bank account for the parent LLC. In Texas, if transactions are reasonably distinguished among child cells, one does not need separate bank accounts per a few attorneys' advice. I have only one EIN for the parent LLC.

One thing for sure, most self-proclaimed gurus or REI 'influencers' do not mention the things you clarified above. For most people, even your example is not even possible in this day (finding 1% rule that is a turnkey for example) to come across. Also, a single capital expense (roof repair, plumbing etc) can wipe away years of cash-flow (if you had cash-flow btw). So imagine the losses on a home that is break-even or negative cash-flow situation plus the mental drain for repairs, communicating with tenants (or PMs--they also bring different kinds of problems). Therefore, if a property does not have the potential of appreciating significantly, investing for cash-flow is not the wisest approach in my opinion. But a property purchased with right price from the right location with a good leverage can be a great wealth builder.

@Dave Kush Thanks for your input. Yeah if you choose more security over less work, then having multiple accounts seems to be the way to go. 

All it takes one eviction to destroy most people's metric of success. Replacing a roof wipes away years of gains if these issues are not factored when buying. Most people's definition of cash flow is also flawed. So, yeah being truly successful in real estate is no common just as it is not in stock markets, bitcoins, or anything else. Otherwise, country would be full of millionaires.

Another issue is survivorship bias. One will see thousands of "how I made X money in real estate" videos but does not see much "how I lost" videos, which makes an illusion among new investors. 

That said, with a good education and training, one can achieve success. And no, I do not mean paying thousands to self-proclaimed gurus, who just want to "help" other investors. Using your local library is a great place to learn more and make less mistakes. I personally avoided many mistakes using the knowledge I got from the books. It is the only place where you get tons of gain for free (well, almost free:))

I have talked with two different attorneys. I got opposing opinions on below and wanted to get what others know (or do) on the subject. Please note that this is for a Texas Series LLC.

1. Imagine you have a Texas Series LLC (parent) with five cells in it (children). Does each of these cell need a separate checking account for a reasonably good asset protection? One attorney said it is a must, whereas other said confidently that it is completely unnecessary. He did not oppose to it, he just thinks only the parent series LLC having one account is enough.

2. I inquired about the possibility of a two-company structure: 

A traditional LLC that is the public face of the activities (collecting rents, paying contractors, etc.) and managing the Series LLC with each property in once cell in it (in this case, Series LLC is serving as a holding role).

Again, one attorney said that would be much better than a standalone LLC and that is recommended approach, and the other said it is waste of time and money since there are some requirements from Texas Real Estate Commission, which is requiring being a licensed broker in the state to operate in the managing LLC.

So, just want to hear what other Texas investors are doing when it comes to series LLCs regarding these issues. 

Thanks

@Bob Stevens I agree and did not ask for a realtor in my post. Maybe a wholesaler, a commercial real estate broker etc.

@Jason Wray thanks for the referral!

How to source them to get notified about potential off-market deals? I am in DFW area but neighboring locations are also doable.

Great info @Michael Plaks. Thanks for sharing!