Creating an LLC

ATN_Pilot said:
Yeah, if you bought it personally and want to move it into an LLC, a simple quit claim deed is the way to go. Just don't record it with the court house if you have a mortgage on it, because the bank may call the loan.

Disclaimer: Nothing I post here is legal, tax, accounting, or real estate advice. Consult an accountant, attorney, or licensed real estate agent in your own state before making any decisions.
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Super simple solution. Establish a land trust then assign to an LLC. Prevents the lender from calling it in.

LLC will only protect you from liability if they are 100% solid. Not something to LegalZoom...
 
ATN_Pilot said:
LLCs are wonderful. It's not so much for tax benefits, though, but for liability shielding. Somebody slips and falls in one of my rental properties and wants to sue? Tough, you can't get anything that isn't held by the LLC. My personal assets are off limits, as are the assets of my other LLCs.
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But, assuming that to be true in any particular slip and fall, that's not going to do that much for someone hiring himself out as a commercial pilot. Pilot crashes airplane, pilot is legally liable, regardless of any entity formed to surround him.

No 1 on the list of common errors about LLCs is thinking that it protects one from responsibility for one owns actions.

Best advice here? The one that said, "consult a professional" rather than SGOTI.
 
wheelsup said:
Super simple solution. Establish a land trust then assign to an LLC. Prevents the lender from calling it in.
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Um, that's not super simple. The quit claim deed can be done in minutes, and it's legal as soon as a notary has notarized it, with no need to record it and risk having the loan called in.

LLC will only protect you from liability if they are 100% solid. Not something to LegalZoom...
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LegalZoom is a joke. Like I said, a good attorney is worth his weight in gold.
 
ATN_Pilot said:
Um, that's not super simple. The quit claim deed can be done in minutes, and it's legal as soon as a notary has notarized it, with no need to record it and risk having the loan called in.
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Just for general information, it's usually not going to do much from a protection standpoint if it's a secret unrecorded deed and the human being is still the owner of public record. Besides, banks don't usually have too much of a problem with a transfer to an LLC formed by its mortgagors with minimal paperwork.
 
MidlifeFlyer said:
Just for general information, it's usually not going to do much from a protection standpoint if it's a secret unrecorded deed and the human being is still the owner of public record. Besides, banks don't usually have too much of a problem with a transfer to an LLC formed by its mortgagors with minimal paperwork.
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Thanks, but I think I'll stick with my attorneys who specialize in real estate and corporate law.
 
MidlifeFlyer said:
Always stick with you own attorneys' advice. There are strange quirks in every state's laws. I'm only speaking in generalities and wanted to just let other know that those rules might not apply to their situation.
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Well said. I can't emphasize enough how much of a difference it makes to have a good law firm to work with if you're running a business. When I was starting out I was trying to do it all myself to keep our costs down, but I eventually realized that I was spending so much extra time trying to research this stuff myself and deal with the legal paperwork that it made a lot more sense to just call up a good attorney and have an answer in minutes, or a document drawn up in no time. It's made us much more efficient, and we're on much more solid legal footing whenever disputes come up. It's amazing how quickly someone's attitude changes about a dispute when he gets a letter from someone on a law firm's letterhead instead of a real estate brokerage's letterhead.
 
ATN_Pilot said:
For maximum liability protection, it's one per house. But that can get expensive in accountant's fees and attorneys' fees (if you're having an attorney set them up for you). I keep 2-3 properties per LLC. I feel that that gives me pretty solid protection. But I'm not as risk-averse as some people, so it's a personal decision.
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It's definitely not cheap but it's also a great peace of mind. The way I have it set up costs a lot I guess but I know I'm not going to lose the farm if something crazy happens.
 
I'm not affiliated with biggerpockets.com, but their podcast is great. Episode 109 (aired just over a week ago), had some great advice on LLCs and real estate.
 
:eek: There are ignorant lawyers out there.

I was buying my present house while in the middle of a divorce (hadda live someplace, and it wasn't gonna be with the ex!). My Title Company Principal had to educate her lawyer about portions of the law in which Florida is, and isn't, a community property state (both practiced here!). She was wonderful, particularly since I was representing myself, and my ex and I had agreed about all the division of property, possessions, etc.

Tense times, but it all worked out.
 
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