All Forum Posts by: Venu Vedre

Hi,

Any recommendations for Civil Engineers in Charlotte, NC area. 

I am looking to get a couple of quotes for a small residential development project in charlotte area. One of my friends recommended hensonfoley and i am looking to get another quote from another company. Wanted to compare their scope of services offered / pricing. 

Thanks in advance!

There are some older threads here that have discussed this before. please feel free to read them. Here are a few things to think about.

Pros of LLC:

An umbrella policy will have a limit. If that is exceeded, a lawsuit can go after your personal assets to make up the rest. With an LLC, if set up correctly, they can only go after assets in your LLC.

Cons of LLC:

We have to maintain strict separation of personal finances/banking from the LLC finances or else the llc veil can be pierced .

You cannot get a loan on an LLC so first you have to buy Rental Properties on your name and then change title to the LLC. This will invoke the Due-On-sale clause that the lender can call.(They have the right to call but not obligated). For ex: If you bought a home at a very low interest rate and rates increased, then bank can call the note so you have to either pay or refinance at a higher rate.

Can be expensive to maintain if you only have 1 or 2 properties

Tax benefits:

I think tax wise both approaches can be handled as pass-through taxation but there are advantages to an LLC if you have a big portfolio or actively flipping houses etc. I have heard some BP podcasts from @Amanda Han and @Brandon Hall that discuss tax strategies that can be useful.

I think if you are just beginning to invest in rentals just take a 1-3 Million umbrella policy to get started. Of course this is my opinion only.

If you decided to go the LLC route I have used delawareinc.com in the past, i think they have reasonable fees but also compare against legalzoom/incnow etc. Hope this helps.

 Thanks Justin, just to confirm in your case(Delaware Series Trust) you would still need to register as a Foreign Entity in CA and pay the 800 annual fee. ? 

@Justin R. I am in a similar situation and found this thread. I am in the process of acquiring a piece of land in North Carolina that has a warehouse and provides monthly income. It will be a Partnership LLC so i understand from a Federal tax perspective(IRS) i just need to file a Informational 1065 but eventually create K-1's and distribute it to partners to show on their taxes. But from a state perspective does Delaware offer any tax benefits vs North Carolina.

Curious which state did you eventually register the LLC and why? Any thoughts are appreciated. Thank you!

Great idea and site is awesome. Thank you Jason.!

Big Namaste to all RE gurus here. Just started educating myself with RE investing. My day job is doing IT for an insurance company in CT. Started listening to Biggerpockets podcasts(still long way to go, but very inspiring ). Also reading through older forum posts and so much to learn.

Here are some (long) questions. Appreciate any advice.

One of my cousin lives in North Carolina. He signed a contract to purchase around 9 acres of land north of Charlotte(from a land owner), and he had submitted all the architectural plans/other paperwork(to build Apartment homes) - and recently got his permission from city town planning. Now his next step is close the land asap and get started on the actual construction work.(Looks like banks only give a construction loan if land is fully owned). He has around 40% of the cash needed to close and he is letting in family/friends on the initial investment(other 60%) to close the land for some equity in the project.

Here is what he is proposing: 

6 family/friends(includes me) should open a LLC and put the 60% of money required to close the land in the LLC bank account. The 6 folks will own this LLC as partners. This LLC will give/loan(not sure what the correct word is) money to my cousin's Company, and there will be an agreement to get a percentage of equity in the construction project(i.e each of the 6 investors may get an apartment after the construction project completes). If for any reason construction doesn't happen they will get a share in the land owned.

Question 1): Is there any better way to structure this? There are no trust issues with my cousin, we are very close but wondering if there are other effective ways to do this.

Question 2): How to get started on doing this. Should i just go to legalzoom.com and talk to them about this(or) Do i need a RE Attorney for this? Any references please. Also, stupid question: I heard a lot about opening LLC's in Delaware, can i open it there without living there? If yes, do i just go to delaware.gov and find one agent?

Question 3): This would be my cousin's first construction project ever. Any risks you can think of? So far he seems confident/motivated whenever i talk to him. He got a investor lined up who seems very interested in buying into(Capstone Property Management) and he is working with a local developer from charlotte(Capsigna Builders) to get his quote/costs.

Thanks a lot in advance!

Venu