All Forum Posts by: Steven J. Umaña

https://www.biggerpockets.com/users/sals44

Certain surrounding areas of Columbus, Ohio present some opportunity.

@Matthew McNeil This is an extremely important consideration that I'm not sure gets enough attention. It's not enough to just have an operating agreement and an LLC. You need an operating agreement that has the appropriate provisions and language in it and you need to adhere to basic corporate formalities like resolutions, bank accounts, and other internal controls to evidence the separateness of the LLC from its members in order to avail yourself of the corporate veil that would shield you from personal liability. You must treat your company (i.e. LLC) like a company and not just an alter ego with tax benefits.

My recommendation is always to wait to form the LLC and until you are sure you are going to close. Sometimes that timing does not match up with what the lender is requiring in terms of due diligence, but in Ohio at least, LLCs are quick and easy to set up so you have plenty of time to set up an LLC once you get through your inspection period and prior to closing. Some people want extra protection and do not want to enter into a purchase contract in their individual name, and in that case, you would want to form an LLC prior to making an offer on the property.

Just sent you a PM @Hans Christopher Struzyna

@Scott E. @Scott Mac  Thanks. These have been a big hit around the country. Great alternative to a kitty tree!

Here is mine: https://www.etsy.com/shop/Kitt...

@Austin Steed More layers certainly doesn't hurt and a lot of larger developers have multiple layers between them individually and the property holding LLC.

If there is a single person who is buying multiple properties, I will sometimes recommend just having various single member LLCs, unless this person plans to JV with others, which in that case use of a parent LLC to act as a member in those JV LLCs is helpful, as well as the parent acting as the sole member of the other title holding LLCs. If there are two or more people who are planning to acquire multiple properties, I always recommend the parent / sub structure so that they do not have multiple, multi-member LLCs which could cause more expense and labor at tax time. These things are easier to talk about over the phone as there are nuances to consider with each investment plan, portfolio, etc.

My recommendation is usually to keep each property in a different LLC to avoid comingling assets and therefore risks to those assets, and to contact your insurance provider in order to ensure the LLC is an insured party under the policy. An important consideration in all of this is to make sure you are operating each LLC as a different "company" as much as possible to lessen a creditors ability to pierce the corporate veil and come after you personally. To further mitigate that risk, we have clients who layer their LLCs with a parent / sub structure which is beneficial for a number of reasons, including scaling a portfolio, entering into to JVs, etc. That being said, there are clients of mine who own hundreds of properties and they like to put 2-3 properties in an LLC as 2-3 properties are a small percentage of the total properties in their portfolio.

The land trust structure could have different benefits in other states, but we normally do not advise clients to use a land trust and an LLC in Ohio, except in the case where our estate planning team advises clients to form and hold assets, including membership interests, in trusts for estate planning purposes. Hope this context helps.