LLC Advise

Setting up your LLC is a good move but you should wait until you have a few deals under your belt first. Many people think that they can set up an LLC and walk into a bank and get money. Nice thought but doesn't work in today's market. Today banks want pers. guarantee's for money and riding off the shirtail of an LLC won't make it happen. You need to start building your LLC's credit history with small loans and on time credit card payments. Once you start building a good credit history your LLC will come in handy when looking for funding. You have to crawl before you walk..Good Luck...Jan

So are saying that it wouldnt be a great move even if both of us have outstanding credit?

an llc seperates buisness and personal credit for obvious reasons,you could use personal credit for initial aquisition then transfer assets to llc,i think

It is a wise move when you have done a few deals...Jan

I Agree like right now I'm trying to Get 5 Deals Under my belt Before I go & Buy A LLC That away If they ask upon seen proof I can show I've done 5 or 6 deal's or so .

I had a few deals under my belt before we bought the 11-plex. My wife and I opened an LLC in which to close the property. No problems. Now, if I want to transfer the other properties into the LLC, isn't that going to be a lot of paperwork and stuff? Would it have been better to start with an LLC, like Thomas is asking? What are the cons of opening a premature LLC (other than losing the filing fee- $160 in MN?)

If you open A Bank account & line of Credit with A Bank like PNC Bank They will ask you for Documents on Deals Or at least Of some Documents showing you're real & doing Business .

just thought I may throw that in for you ....LOL

Good questions.
We are located in upstate NY which is where we formed our LLC. Not the cheapest state to do this in. Roughly $1000.00 to form, with all fees combined.
Our thoughts were this. Since we continue to grow and buy more props it became evident there would be isssues out there. We talked with our attorney and accountant and decided for future growth and protection we needed an LLC as opposed to an S Corp, many pros and cons but the LLC route was our best move. Extra work was involved changing over ins coverage, checking accounts, utility carriers etc, but has been done and better off for it.
Michael, you will need a EIN number from your accountant to open your checking accounts.
As far as protection from liabilities go, now we are covered.
On the financial end of it, we still have to pers qualify for funding even if it goes to the LLC. We are in the process now closing on a 4 fam and the paperwork is still a pain. The more we do on our own the more money we save.
Andrew, yes you will incurr costs transfering props from your own name to an LLC which I am sure you know by now.

Hope this helps everone...Post any other questions and I will answer if I can....Jan

There are so many more LLC knowledgable folks than I...just listen to them. But I wanted to say God Bless you for your service in Iraq and hope you get to come home soon. My son just got back and will muster out in July...while his buddies on the USS Ronald Reagan is in the mist of everything. Take care young man, and just the DONALD if real estate is a good investment.