All Forum Posts by: Steve Combs

You will need to file Articles of Organization with NJ and you will need an Operating Agreement to serve as your management document. You can prepare these yourself if you feel confident. My legal can prepare them for $100.

I recommend Buildium for my clients with less than 200 units. If you are computer savvy it is fairly easy to setup and manage 

@Danny Cerecedes How many LLCs you want is up to you. If you are the sole Investor in all your business, you can lump everything into one LLC.

But, if you have two or more completely unrelated business, say rentals and an auto parts store, I would recommend an LLC for each. Or if you are doing rentals by yourself and open a separate construction company with a friend as partners, you will want a separate LLC for both as you will need separate accounting, profit splits and liabilities.

If you do real estate in different states, you can do a LLC in each state or one main LLC than register it in each specific state. Depending on the state, cost wise it will probably be a wash. You just need to think how your going to organize the RE company. Questions to answer for yourself: How are you going to fund it? How are you going manage it? Will you have investors or partners?

Steve

I think that having long distance investments is something that every RE Investor should consider. It can add diversification to your portfolio. And some markets are better than others. But you have to consider if such a transaction fits your specific investment strategy and risk tolerance.

When I consider an investment out of my area, I will research the market as much as possible. I than will make a trip or two to get familiar with that market. I will work with a local agent and I personally inspect the property before making a decision and I attend all the closings, that is just my personal preference. I will also go inspect the property a couple of times a year. I will generally buy a few properties in one market to make the travel worthwhile. If it is an area I wouldn't want to visit, I wouldn't buy there.

I also get a local team set in the area realtor, PM and maintainence so I have someone to call when a problem arises.

Steve

Ryan,

I believe outsourcing is something that all business should consider. However, looking to pay less than $5 an hour is challenging. 

In my experience, you can find people in India, Pakistan and other foreign countries for $6-$9 and hour and US based people for $9 an hour and up. You can find rates less than that, but you get what you pay for. In hiring a foriegn working, you want to fully vet them, their English skills and you will need to provide clear instructions and supervision. Many times a foriegn worker will have problems grasping US business concepts, methodology or instructions. With anyone you hire, you will need to be a good manager and review their work and provide feedback.

Steve

Danny,

Nevada has a good corporate veil, but for small business or a few rentals, I personally would not incorporate there unless there was another compling reason.

You mentioned your rental is in Kansas City, is that where your looking aquire others? If so, than Kansas LLC. If not go where you think most of your properties are going to be located.

Also any assets in the LLC can be attacked if the LLC gets into trouble. Therefore, I would recommend separate LLCs for each distinct partnership or business. I would keep personal assets out of the LLC. But, if you don't have it already look into a umbrella liability insurance policy.

Steve

James,

It looks like you are from California. Is there a reason why your electing to incorporate in Nevada? Is that where your property is? Is it to save on taxes? Another reason?

If you incorporate in NV and your property is in another state, say California, you will need to register the foreign corporation with that other state, which can cost more than the NV incorporation.

Also, if your property is in another state that does have corporate income taxes, you will need to file a corporate tax return in the state where that income was generated.

I would recommend you consult with an attorney and and accountant to ensure you are making the best decision.

Steve

You should probably talk with a New York attorney. 

Are you actually going to be renting, flipping or otherwise doing any business in NY with the LLC? If so your going to have register in NY.

If you are going to be transacting all business in NJ, you probably don't need to register in NY. Do you k ow a person who lives in NJ who can serve as the registered agent? If not you will need to hire a registered agent if you incorporate in NJ before moving there.

What do you need a bookkeeper for? Transaction entry, reports, tax planning? How many flips are you doing a month? Do you have a lot of paperwork? Or do you just not want to bother with the bookkeeping yourself?

 I'm sure they would do a good job. The realtor seems to say in her response...it makes my job easier if you use my attorney.

It is about what you want, not what makes it easier for the realtor. Also, if you buy foreclosures, the seller will sometimes require you to use their attorney as part of the deal.