LLC Benefits

Kelly & FDrake -

Although I am new to REI; I do know something of business and finance. There are actually a couple of technigues to accomplish this.

Actually, the D&B is only the credit bureau for businesses or corporations. You need credit accounts to add to your profile there. Try these tips:

a)Open a business savings account ($1-200, or what ever you can afford) at your local bank. Wait 30 days; then go there and ask for a secured (bank book) loan for the same (or half) the amount. Open a business checking with the loan proceeds; using these funds to pay the secured loan within 2-6 mos.

b)Once your business account is in place; open business accounts at your local office supply store (i.e., Office Max or Office Depot)for the same amount $1-200) Then use this credit card for small purchases, such as a printer, ink, paper or other supplies.

Now your business has two credit references! Update your D&B (Dunn & Bradstreet) business profile with these two accounts. You can also use a similar strategy to improve your personal credit score as well.

I hope this helps!
________________

Happy & blessed investing!
Kim

Don't ask the people trying to sell you one. Ask a trusted CPA or professional. In some cases, an S-Corp or sole proprietorship may be better from a taxation standpoint.

I just shut down my LLC. Why? Because I shouldn't have opened one until I really needed one. Yes you might have ambitious goals but honestly, wait till you have a real need to limit your liability and create a separation from your personal assets.

Your credit is only as good as your personal credit. You personally have to back the LLC.

They're expensive: i.e., so make sure you really need one.
The Company Corporation was nice enough to help me open mine for about $650 (fee)in October and didn't bother to tell me that I would pay the $800 (California Corporate tax) for the calendar year.

Then again in January when I filed my taxes, another $800 were due to California for the new calendar year. Tack on $250 for the agent of record to file your paperwork, plus $450 for business tax return and I was already down over $2500
before receiving one red cent of revenue or having any kind of real issue requiring me to limit my liability.

Do your homework on this one..

Here's some out of the box thinking on this liability issue. Learn about the unsurpassed benefits of Self Directed IRA's to buy property.

If you have a 401K or an IRA sitting around getting hammered in stocks, consider if it's in your best interest to roll it over to a Self Directed....

How do you limit liability? You don't own the property, your Self Directed IRA does. And retirement accounts are generally judgement proof. (Except from the IRS and the Mrs.)

But the real sweet deal with Self Directed's is that you can buy and sell Real Estate all day long without paying a penny in realized gains. Until of course you begin taking distributions after age 59-1/2. Compound the 20% plus tax savings over 15-20 year period and you'll do a double take on the money you get to keep in your nest egg.

Im in the proccess of buying my first investment property for cash.
And i dont know if i should buy the property in my name and then quit deed the property to LLC or just buy it as LLC which way is better or is there any difference.

I am reading your post from the first page and taking several notes down, especially on the LP and LLC information.

I am brand new to this - as a matter of fact, I am still reading the book! I will be likely creating an LP soon.

I don't have a lot of assets...I actually have a car I wish someone would take off my hands I do have close to perfect credit though and I am afraid of ruining it.

Anywho...THANK YOU EVERYONE for all of your knowledge!!!

where did you go to file for your LLC? i looked at nevada, but it cost close to 500.
i am just getting started and i don't have hat kind of money to put into it.

I've had my own LLC company in the past and with that experience there are some things to point out. First off, I am not an attorney nor a CPA, so this information is for educational purposes only.

Even with an LLC, almost every lender, including credit card companies, will require you to personally guarantee the credit line with your name and SS#. I've not seen or heard of a clear way around this.

Also, I've learned to better protect your assets of the LLC is to actually have 2 companies. The 1st LLC's sole member is the the 2nd LLC and the 2nd LLC member would be you. This makes it much more difficult to get to you and your personal assets in case of a law suit, etc.

The best thing about an LLC is you have the choice to either file your taxes as a sole prop or a corporation. I would recommend filing as a corporation as their are many additional deductions and tax breaks. There is a specific form you must file with the IRS to be able to file as a corporation for the next year. Please consult your CPA for the correct form.

Well, that is my .02 worth on LLC. I welcome any/all comments and/or added information to this post.

Terry

I currently own over 20 homes and have owned over 50 in the past and my credit is taped out. No lender will lend after 10 homes today. But I have managed to keep the homes and turn a profit. I am currently looking for a financial partner or several financial partners. I was thinking of setting up a LLC for the partnership. Then transfering the property(s) into a trust with the partners as the trustees and or beneficiaries upon closing at escrow. But I like the idea of purchasing the property with the series LLC. I would like to know more about this or any other helpful comment about how to market to financial partners.

your answer provides clarity and balance to the reasons for and expense in getting a LLC. Thank you. What source did you use to get your LLC set-up? Does this source also explain the quit claim procedure after you aquire property?

Sorry so long to reply I hadn't checked this thread in forever. I just bought my 3rd prop and will be rolling all 3 into a series. Not all 50 states do it so talk to your local real estate attorney as soon as you can. Get recommondations and references, call around don't just go with the cheapest guy out of the phone book. If they don't do a series they can help set up the LLC. The series is not terribly expensive around $500 to create I believe. Than as I understand it, they just drop all the properties into it.

If this is still too much $$$ for you to spend at this time than try www.legalzoom.com where you can set up an LLC on-line. Although a good attorney by the way will answer questions you may have through out the year at no extra charge like your CPA would.

Good luck!
Sincerely,
Angie

Series LLC availabilities are given per state. The cost also varies per state. I will pay $52 where as Angie will pay $500.

A series LLC is when you have a LLC which has basically separate departments within the LLC. You can own several properties under one LLC. If there is a lawsuit the property in its own department can only be in a lawsuit individually.

These are great products to look for.

Hello all. Am new to this forum and have read everything that's posted and I appreciate all the information this forum have provided. I am waiting on DG book to arrive but I do need some clarity on a few things.

I am in the same situation as a few others, I currently do not have a job, have no money and poor credit. But am seeking to change my circumstances, which is why I am interested in real estate.

Here are my plans which I am seeking any advice or guidance on.

(1) I want to get into assigning properties but the question I have is:
When contacting investors do I ask how much they pay as a finder's fee
or do I just say that am an investor to and have several properties that
I would like to get off my hand etc... I believe I read a response from
Sully saying something like this. Which is better approach when
contacting investors?

(2) While assigning properties I also want a establish a company and start
building credit so I can obtain a loan to purchase property under that
company's name. I do live in Florida in Palm Beach County. LLC's are
not expensive to set up here, but, as I was reading I see some people
suggesting land trusts and having a LLC as a beneficiary. Others are
suggesting S-corps because they offer better tax benefits. Am
confused! For a newbee like myself. Aftering assigning several
properties I want to get into buying of my own and renting them out and
then get into the flip and rehap stuff once the market turns around.
But I do want to start off on the right foot first and it
right once. So which type of entity would be better if my ultimate goal
is to get into buying and renting some properties and flipping and
selling others?

Just to note I have read where LLC's are better for renting properties
and C-corps are better for flipping and rehabbing properties. Any
thoughts on this?

(3) Once I establish the company are there any other suggestions how I can
establish credit for the company. Is there like a website that I can
obtain credit cards or is it better to start off with in-store cards?

(4) Is it better to get into buying tax liens as opposed to foreclosure or
REOs?

I am looking for a mentor. So if you live in South Florida - Palm Beach County and doing real estate investing - so pleace contact me. I would love to hear from anyone doing this in this particular county.

LSM

P.S. Sorry for the longwinded post.

HI,
Just finish reading Dean's book "profit From Real Estate Right Now",so where do i go from here ....any suggestion will be appreciated. Anita, you and xchangereal seem to be doing great or at least got yopur stuff together. HELPPPPPPP!!!!!!!

Thanks

I have couple questions or concerns... My CPA recommended to get a LLC through herself or a lawyer as they provide more benefits than LegalZoom. But, their charges are about $700-$800 for the LLC. LegalZoom is a lot cheaper. Does anyone have experience using LegalZoom? If so, what do you recommend? What type of package to purchase? LegalZoom states that they only provide an agent for 6 months. From what I've read, if you do not have the agent, the LLC could be null. Please provide some advise on this topic. Thanks!

Hi everyone, when establishing a LLC with hopes of re-establishing a workable credit status for your new business. How does your past credit history not tie into the new if you are using your current address? Who offers a small credit line for a LLC? Thanks, Great Success to all!

I am thinking that it will create a problem...I have researched the name I want to use, and it is currently available. However, what if I create the website name, and then someone creates an LLC with the same name? I presume I would have to remove mine, because theirs is now legally established. Or, am I missing something?

Darryl

Hi Darryl. I think you are correct in your thinking. We have had quite a time trying to get our company name approved. We finally have an "official" name for our Corporation, after 3 that were originally available and ok'd by the State of CA, and later rejected. I would get my Corporation established first, personally!

This is what I and my associates have done;

Buy the house in cash and put it in your LLC's name

Your LLC owns the house free and clear

Get a mortgage or HELOC that you can manage

Pay the loan

Credit increases

Voila

Hi mydestiny,

Are you asking if a previous LLC's credit or your personal credit will effect the new LLC? Either way, the new LLC will have a new EIN (Federal Tax ID) and therefore should be considered a new entity. Then you can use Dun & Bradstreet services to help you build the credit worthiness of the new LLC. Hope this helps.

*** I'm not an attorney and this subject matter is for educational purposes only ***

Hi AreInvestor,
It was in regards to my personal credit. Again thanks for the info. I'm looking into this now. Isn't this site great? Continued success.........Lubertha

It's my understanding that you can put all your real estate investments under/in your LLC. My LLC is being formed as we speak. I went online to State of TN (I'm from TN) www.stateoftn.com. Do a name search to make sure no one else has that name in your state. Then click on Secretary of State and it will give you the option to click on form an LLC. It take about 4 weeks to complete. For just a small fee they will take care of getting your EIN number for you. Good Luck! BD

I'm very new to this REI Business. I am forming an LLC as we speak. In the State of TN the LLC fee is $100.00 per year. You could pull up the website for the Secretary of State and ask that question. That is a very good question. I'm sure I will be needing alot of help with my new business from all of you myself. Good luck to all of us!

good grief. it's $150 to start one here then $20.00 a year to keep it.

Is LLC and INC basically same or are there any differences?
If anybody can help me with this.
I created 2 Inc. s seperately for my two properties in NY. How do I include the two properties under the newly created INC.
Anybody would give me advice on this.
Will appreciate your help.

Is LLC and INC basically same or are there any differences?
If anybody can help me with this.
I created 2 Inc. s seperately for my two properties in NY. How do I include the two properties under the newly created INC.
Anybody would give me advice on this.
Will appreciate your help.

Welcome to the DG family! I would imagine you would do the same as you would if it was not under an LLC. And that is to quit claim it. Much success to you..........Lubertha

I have just finished reading Dean's book and one of my main questions as I began to prepare my plan of action was about whether or not to set up an LLL. I just signed on to this web site for the first time today, and was excited to see this thread listed. What a wonderful resource this is! I took notes the whole way through and have learned that there are even more options than an LLC. I will be following up on the websites and advice provided. Thanks to all who have shared your knowledge and experience with the rest of us!

Or beat him bad enough that he can't/won't sue

I'm pretty new around here and are getting overwhelmed with all the info being sent my way. I've been working on coming up with a name for a company and I'm part of the Success Academy. I recently got a (expected) call from The Tax Club. Has anyone dealt with them? The have a program (that costs a fair amount of $$, or course) to help you set up your company and make sure it's all done correctly as well as help you our with working on gaining credit through your company.

Have any of you done this? It sounds good, but it's a lot of money and a lot of extra time on top of the time being spent on Success Academy stuff.

Thanks.

I havent made any deals yet, and havent received my book yet, but I have to say that I have been learning a great deal through these forums, and I think that you are all brilliant in your own way and with your own experiences I have been learning a lot. My questions is, I own a house in Florida, which is being occupied by my daughter. I live in Puerto Rico temporarily. Before I start investing, should I do an LLC? and how or with whom should I pair up to make it less risky? is it okay to pair up with my husband?