All Forum Posts by: Sean Morrison

Aside from whether it's a good idea to focus on many things, having the same LLC do those two different tasks is probably not a great idea. First, you could be mixing active and passive income, which might lose some tax benefits. Second, if the same LLC holds property and lunch boxes, then your property is exposed to any lunch box problems. For example, your lunch boxes have sharp edges that cut people. If they sue, they can go after your commercial properties. Third, your business is exposed to the property. If somebody slips and falls, they could go after your business.

The prices can vary widely on LLC formation, but that's often the difference between someone who is filling in a form, and someone who is creating something that will actually protect you. With your portfolio and growth, you'll want someone who understands real estate investing and asset protection, which can be very different than other types of businesses.

As for points 2-6, the short answer is be ready to hire somebody. 

I've used Docusign and Hellosign, but just recently moved to Zoho Sign because it's part of a larger suite of software products that help with integrations. They all do basically the same thing.

Series LLCs are typically considered separate LLCs for liability protections. However, keep in mind that many states don't give a lot of protection to a single-member LLC. They probably also require separate accounts, contracts, signatures in their name, etc. Ultimately, it may not matter how many series you have if the veils can all be pierced.

A few issues I see. First, @Mike S. is correct, putting a single trust into the LLC would make it a single-member LLC would could forfeit some liability protections. Your living trust will not give you any asset protection.

Second, one of the estate planning benefits of owning property in an LLC is that you can put the LLC interest into the trust without transferring title to the property (in most states).

Third, if someone wants thier children to take over the business, not just inherit it, they must also include some business succession planning within your LLC to make sure that happens. What happens if one kid wants to pursue the business and the other doesn't? How do you avoid a liquidation?

Here's the real takeaway - if you have rental property and an LLC, it's probably worth having an estate planning attorney (with business and real estate investing experience) put together your trust. They'll cover these issues.

First, consider joining the NOREIA or Northshore REIA, we'd love to have you. Second, with a deceased owner, you could try the clerk of courts (in either Orleans or Jeff Parish, depending on the property) to see if somebody has filed a succession. Though it's possible nobody did. Talking to the neighbors is probably a great way to learn about the property.

As @Mike Burkett said, you can have your ownership interests and distributions set differently. Your operating agreement could give you 20% ownership, but 50% of the profits if that's what your deal is. It's also important to spell out how decisions are made so that you're not stuck with just 20% of voting power. Unless everything goes belly up and the LLC is dissolved and liquidated, the ownership percentage shouldn't have too much effect on your payout.

If you focus your numbers and remember to analyze them as a rental, not your primary, this strategy can work very well. I'm working on my second house under this type of strategy. It's a great way to build equity in the home before you refinance.

Best bet it to talk to an attorney. There are a few options. Quick and dirty, if you own both LLCs, is to simply draft up a quitclaim deed and file it with the clerk of courts. You'll owe transfer taxes and future buyers may question the quitclaim. Another option is to merge the LLC, or have one become a parent to the other. Not sure if those would fit your goals though.

Having a trust is the best bet as you can put the membership interest in the trust's name and avoid probate. Your attorney can also help revise your operating agreement to better handle multiple members. It may also be worth considering a buy-sell agreement with your children in mind. That could help in disputes where some children want to continue the business, and some want out. It'll outline how to handle those situations. You can even combine that with life insurance policies held by the company to facilitate buy-outs.