Established LLC and Credit

Thank You Anita you have been a great help.

I spoke with the Secretary of State....and a correction, the company was formed here in Ca, she just bought the properties NV....but the told me that the company was properly cancelled, so I would have to start from scratch.

Theres alot of Banks out there That dont require to have a DNB number or a paydex score That will get you anywhere from 30k - 60k...You dont need tax returns...no documentation...

If you have an LLC or Corp that aged min 3 years it can be done....
I do this all the time for quick cash to do my Deals

In my state, South Carolina, getting an LLC is easy. I just went to the Secretary of State office building, filled out two sheets of paper, paid $110 and I was on my way. I also heard that income tax preparers can fill one for you and/or legal zoom.com

Hi Anita, like jrgnsn, I found out that it can be bad to hold 5 houses in my name because it affected my ability to get loans (not just purchase loans, but also refinance loans). Now I am considering putting my investment properties into an LLC to circuvent this problem, but I am wondering if this will work, or if I would even be able to do this if I transfer title from my name into the LLC.

You mentioned that you were given a bank line of credit through your LLC to purchase store inventory and a light bulb went off in my head because I thought this might be a way for me to come up with cash to buy property. Were you able to convert this credit line into cash to purchase real estate, or did you use it mainly to get an increased credit line with other lenders?

Thank you for this information.

As I have said before... you should always consider putting your properties under an LLC - just to protect you, personal assets and etc.

Hi

This is my first time to use forum. Want to buy some properties and contact the lender. Was told that the law has changed that can't use LLC for properties if using regular mortgage loan. Must use commercial loan which is more interest rate than regular loan. I rather to use LLC than my personal mortgage loan. I am open for any suggestions, tips, or whatever.

Thanks,

Andy U
DBG, Inc.

“Many of life's failures are people who did not realize how close they were to success when they gave up.” - Thomas A. Edison

Steve mj L wrote:

Newbie here... I am just ready to send in the paperwork for S Corp, 125.00 filing fee. My accountant said it would be better than LLC, no social security tax or medicaid. I remember reading a sticky earlier on, on the subject, but I thought this was the better way to go..? I've already bought one property in my name, but will quick claim it soon. Any suggestions?
Thanks to everyone, this is my first post. Bought Dean's books a month ago and will close on my first rental Tuesday.

I am new too in RE and was told by my CPA that I should have an S Corp LLC but I read that LLC provides better protection than S Corp. I told her that my investment strategies are buy and hold and working with people who would funds the deal then sell quickly. The people with money also want his/her name on the deed. She said if that is the case then at the end of the year I will need to provide a 1099 for each of them.
Most of the business cards of REI have LLC for their business, can an S Corp have LLC behind the name such as Soi Properties LLC.? Or Soi Properties and something else?
Also, can you have an S Corp and then buy each property in an LLC? What is the point in having an S Corp then also have an LLC?
I know this is confusing, because I am confusing myself right now. So please help me Anita? Anyone? Your input is greatly appreciated since I am ready to apply for my business name but want to make sure everything is proper. I am not second guessing my CPA but I would like advice also from my co-real estate investors since you all are doing the business.
Thank you.
coco

S Corp. vs. LLC: Which Structure is Right for Your Business

Determining the type of legal structure for a new business can be daunting for entrepreneurs and small business owners. Learn more about S Corporations and Limited Liability Companies (LLC), and decide if one of these business structures is right for you.

Determining the type of legal structure for a new business can be daunting for entrepreneurs and small business owners. Corporations and limited liability companies (“LLCs”) are preferred business structures because, unlike sole proprietorships and partnerships, both offer liability protection. This means that the owner of a company cannot be held personally responsible for the company’s debts. The personal assets of an owner are shielded from company liabilities.
In researching the various business structures, one inevitably comes across the S corporation. S corps and LLCs are similar in that they are both “pass-through” entities for tax purposes; the income of these companies are passed through to their owners and reported on the owners’ personal income tax returns, thereby eliminating the double taxation incurred by owners of a standard corporation, or C corporation. (With a C corporation, the net business income is subject to corporate income tax, and the monies remaining after the corporate income tax are taxed a second time when they are distributed as dividends to its owners who must then pay personal income tax.)
So what is the difference between an S corporation and an LLC? And which structure is right for you?
The answer depends on your own unique situation. If operational ease and flexibility are important to you, an LLC is a good choice. If you are looking to save on employment tax and your situation warrants it, an S corporation could work for you.
Business Ownership & Operation

There are restrictions on who can be owners (called “shareholders”) of an S corporation. An S corporation can have no more than 75 shareholders. None of the shareholders can be nonresident aliens. And shareholders cannot be other corporations or LLCs.
An S corporationis operated in the same way as a traditional C corp. An S corp. must follow the same formalities and record keeping procedures. The directors or officers of an S corp. manage the company. And an S corp has no flexibility in how profits are split up amongst its owners. The profits must be distributed according to the ratio of stock ownership, even if the owners may otherwise feel it is more equitable to distribute the profits differently.
LLCs offer greater flexibility in ownership and ease of operation. There are no restrictions on the ownership of an LLC. An LLC is simpler to operate because it is not subject to the formalities by which S corps must abide. An LLC can be member-managed, meaning that the owners run the company; or it can be manager-managed, with responsibility delegated to managers who may or may not be owners in the LLC.
And the owners of an LLC can distribute profits in the manner they see fit.
Let’s say, for example, you and a partner own an LLC. Your partner contributed $40,000 for capital. You only contributed $10,000 but you perform 90% of the work. The two of you decide that, in the interest of fairness, you will each share the profits 50/50. As an LLC you could do that; with an S corporation, however, you could only take 20% of the profits while your partner would take the other 80%.
Employment Tax: Savings vs. Paperwork

A major factor that differentiates an S corporation from an LLC is the employment tax that is paid on earnings. The owner of an LLC is considered to be self-employed and, as such, must pay a “self-employment tax” of 15.3% which goes toward social security and Medicare. The entire net income of the business is subject to self-employment tax.*
In an S corporation, only the salary paid to the employee-owner is subject to employment tax. The remaining income that is paid as a distribution is not subject to employment tax under IRS rules. Therefore, there is the potential to realize substantial employment tax savings. Case in point:
Mary owns a print shop. In keeping with the industry standard, Mary decides that a reasonable salary for a print shop manager is $35,000 and pays herself accordingly. Mary’s total earnings for the year are $60,000: $35,000 paid in salary and the remaining $25,000 paid as a distribution from the S corp. Mary’s total employment tax is $5,355 (15.3% of $35,000).
If Mary were the owner of an LLC, she would have to pay employment tax on the entire $60,000, equaling $9,180. But as an S corporation, she realizes savings of $3,825 in employment tax.
One might assume that these savings could be further manipulated by reducing the salary to an extremely low amount and attributing the rest of one’s earnings to distributions—but this would be an incorrect assumption. In practice, the IRS is careful to notice whether a salary is reasonable by industry standards. If it determines a salary to be unreasonable, the IRS will not hesitate to reclassify distributions as salary.
Still, while the potential employment tax savings may make the S corporation an attractive structure for your business, bear in mind that you would then have to deal with all the paperwork associated with payroll tax. The payroll tax is a pay-as-you-go tax that must be paid to the IRS regularly throughout the year--on time, or you will incur interest and penalties. The paperwork alone can be an overwhelming task for someone who is not familiar with this; and if you expect to incur losses or otherwise experience a cash flow crunch during the year that would hinder you from paying the payroll tax when due, this could present a problem.
Owners of LLCs pay their self-employment tax once a year on April 15 when income taxes are normally due. Income tax filings are also relatively easy for the owners of an LLC: A single-member LLC files the same 1040 tax return and Schedule C as a sole proprietor; partners in an LLC file the same 1065 partnership tax return as do owners of traditional partnerships.
The comparison chart below sums up the similarities and differences between the two business structures:
S Corporation Limited Liability Company
Liability Protection Yes Yes
Operational Control Board of Directors/Officers May be member-mgd or manager mgd
Federal Income Tax Pass-through Pass-through
Flexibility/Ease of Operation No; subject to some formalities and record keeping rules as traditional C corps Yes
Ownership Restrictions Yes No
Flexibility in Profit-Sharing No Yes
Employment Tax Employment/payroll tax on salary; no employment tax on dividends paid to shareholders Self-employment tax on total net income *
There is no one, magical entity that works for everyone. A CPA or a specialized tax attorney can assist you in choosing the right structure for your business. The important thing is to consider the operational, legal and tax aspects of each structure as they apply to your unique situation.

* The self-employment tax rate for 2009 consists of two parts: 15.3% for social security and 2.9% for Medicare. In 2009, only the first $106,800 of total net income is subject to the social security portion of the tax. All of the the total net income is subject to the Medicare portion of the tax.
*For those who prefer the tax treatment of an S corp but like the simplicity of an LLC, there is an alternative worth considering: Forming an LLC that is taxed as an S corp. An LLC may make a special election with the IRS to be taxed as an S corp. This election is made on IRS Form 2553 and must be filed with the IRS before the 16th day of the third month of the tax year in which the election is to take effect.
An LLC that is taxed as an S corp is still a limited liability company from a legal standpoint (subject to the laws governing limited liability companies in the state of formation); however, for tax purposes it is treated as an S corp.
A word of caution: Certain nuances of S corp taxation can be confusing to some LLC owners, especially do-it-yourselfers and/or those who prepare their own tax returns; for example, an LLC owner might easily make the mistake of referring to an IRS publication that addresses LLCs when, in fact, such a publication would not apply to an LLC that is taxed as an S corp--and such an error could lead to negative tax consequences. It is therefore highly recommended that you consult a CPA or other qualified tax professional for advice and/or assistance.

S Corp. vs. LLC: Which Structure is Right for Your Business

Determining the type of legal structure for a new business can be daunting for entrepreneurs and small business owners. Learn more about S Corporations and Limited Liability Companies (LLC), and decide if one of these business structures is right for you.

Determining the type of legal structure for a new business can be daunting for entrepreneurs and small business owners. Corporations and limited liability companies (“LLCs”) are preferred business structures because, unlike sole proprietorships and partnerships, both offer liability protection. This means that the owner of a company cannot be held personally responsible for the company’s debts. The personal assets of an owner are shielded from company liabilities.
In researching the various business structures, one inevitably comes across the S corporation. S corps and LLCs are similar in that they are both “pass-through” entities for tax purposes; the income of these companies are passed through to their owners and reported on the owners’ personal income tax returns, thereby eliminating the double taxation incurred by owners of a standard corporation, or C corporation. (With a C corporation, the net business income is subject to corporate income tax, and the monies remaining after the corporate income tax are taxed a second time when they are distributed as dividends to its owners who must then pay personal income tax.)
So what is the difference between an S corporation and an LLC? And which structure is right for you?
The answer depends on your own unique situation. If operational ease and flexibility are important to you, an LLC is a good choice. If you are looking to save on employment tax and your situation warrants it, an S corporation could work for you.
Business Ownership & Operation

There are restrictions on who can be owners (called “shareholders”) of an S corporation. An S corporation can have no more than 75 shareholders. None of the shareholders can be nonresident aliens. And shareholders cannot be other corporations or LLCs.
An S corporationis operated in the same way as a traditional C corp. An S corp. must follow the same formalities and record keeping procedures. The directors or officers of an S corp. manage the company. And an S corp has no flexibility in how profits are split up amongst its owners. The profits must be distributed according to the ratio of stock ownership, even if the owners may otherwise feel it is more equitable to distribute the profits differently.
LLCs offer greater flexibility in ownership and ease of operation. There are no restrictions on the ownership of an LLC. An LLC is simpler to operate because it is not subject to the formalities by which S corps must abide. An LLC can be member-managed, meaning that the owners run the company; or it can be manager-managed, with responsibility delegated to managers who may or may not be owners in the LLC.
And the owners of an LLC can distribute profits in the manner they see fit.
Let’s say, for example, you and a partner own an LLC. Your partner contributed $40,000 for capital. You only contributed $10,000 but you perform 90% of the work. The two of you decide that, in the interest of fairness, you will each share the profits 50/50. As an LLC you could do that; with an S corporation, however, you could only take 20% of the profits while your partner would take the other 80%.
Employment Tax: Savings vs. Paperwork

A major factor that differentiates an S corporation from an LLC is the employment tax that is paid on earnings. The owner of an LLC is considered to be self-employed and, as such, must pay a “self-employment tax” of 15.3% which goes toward social security and Medicare. The entire net income of the business is subject to self-employment tax.*
In an S corporation, only the salary paid to the employee-owner is subject to employment tax. The remaining income that is paid as a distribution is not subject to employment tax under IRS rules. Therefore, there is the potential to realize substantial employment tax savings. Case in point:
Mary owns a print shop. In keeping with the industry standard, Mary decides that a reasonable salary for a print shop manager is $35,000 and pays herself accordingly. Mary’s total earnings for the year are $60,000: $35,000 paid in salary and the remaining $25,000 paid as a distribution from the S corp. Mary’s total employment tax is $5,355 (15.3% of $35,000).
If Mary were the owner of an LLC, she would have to pay employment tax on the entire $60,000, equaling $9,180. But as an S corporation, she realizes savings of $3,825 in employment tax.
One might assume that these savings could be further manipulated by reducing the salary to an extremely low amount and attributing the rest of one’s earnings to distributions—but this would be an incorrect assumption. In practice, the IRS is careful to notice whether a salary is reasonable by industry standards. If it determines a salary to be unreasonable, the IRS will not hesitate to reclassify distributions as salary.
Still, while the potential employment tax savings may make the S corporation an attractive structure for your business, bear in mind that you would then have to deal with all the paperwork associated with payroll tax. The payroll tax is a pay-as-you-go tax that must be paid to the IRS regularly throughout the year--on time, or you will incur interest and penalties. The paperwork alone can be an overwhelming task for someone who is not familiar with this; and if you expect to incur losses or otherwise experience a cash flow crunch during the year that would hinder you from paying the payroll tax when due, this could present a problem.
Owners of LLCs pay their self-employment tax once a year on April 15 when income taxes are normally due. Income tax filings are also relatively easy for the owners of an LLC: A single-member LLC files the same 1040 tax return and Schedule C as a sole proprietor; partners in an LLC file the same 1065 partnership tax return as do owners of traditional partnerships.
The comparison chart below sums up the similarities and differences between the two business structures:
S Corporation Limited Liability Company
Liability Protection Yes Yes
Operational Control Board of Directors/Officers May be member-mgd or manager mgd
Federal Income Tax Pass-through Pass-through
Flexibility/Ease of Operation No; subject to some formalities and record keeping rules as traditional C corps Yes
Ownership Restrictions Yes No
Flexibility in Profit-Sharing No Yes
Employment Tax Employment/payroll tax on salary; no employment tax on dividends paid to shareholders Self-employment tax on total net income *
There is no one, magical entity that works for everyone. A CPA or a specialized tax attorney can assist you in choosing the right structure for your business. The important thing is to consider the operational, legal and tax aspects of each structure as they apply to your unique situation.

* The self-employment tax rate for 2009 consists of two parts: 15.3% for social security and 2.9% for Medicare. In 2009, only the first $106,800 of total net income is subject to the social security portion of the tax. All of the the total net income is subject to the Medicare portion of the tax.
*For those who prefer the tax treatment of an S corp but like the simplicity of an LLC, there is an alternative worth considering: Forming an LLC that is taxed as an S corp. An LLC may make a special election with the IRS to be taxed as an S corp. This election is made on IRS Form 2553 and must be filed with the IRS before the 16th day of the third month of the tax year in which the election is to take effect.
An LLC that is taxed as an S corp is still a limited liability company from a legal standpoint (subject to the laws governing limited liability companies in the state of formation); however, for tax purposes it is treated as an S corp.
A word of caution: Certain nuances of S corp taxation can be confusing to some LLC owners, especially do-it-yourselfers and/or those who prepare their own tax returns; for example, an LLC owner might easily make the mistake of referring to an IRS publication that addresses LLCs when, in fact, such a publication would not apply to an LLC that is taxed as an S corp--and such an error could lead to negative tax consequences. It is therefore highly recommended that you consult a CPA or other qualified tax professional for advice and/or assistance.

S Corp. vs. LLC: Which Structure is Right for Your Business

Determining the type of legal structure for a new business can be daunting for entrepreneurs and small business owners. Learn more about S Corporations and Limited Liability Companies (LLC), and decide if one of these business structures is right for you.

Determining the type of legal structure for a new business can be daunting for entrepreneurs and small business owners. Corporations and limited liability companies (“LLCs”) are preferred business structures because, unlike sole proprietorships and partnerships, both offer liability protection. This means that the owner of a company cannot be held personally responsible for the company’s debts. The personal assets of an owner are shielded from company liabilities.
In researching the various business structures, one inevitably comes across the S corporation. S corps and LLCs are similar in that they are both “pass-through” entities for tax purposes; the income of these companies are passed through to their owners and reported on the owners’ personal income tax returns, thereby eliminating the double taxation incurred by owners of a standard corporation, or C corporation. (With a C corporation, the net business income is subject to corporate income tax, and the monies remaining after the corporate income tax are taxed a second time when they are distributed as dividends to its owners who must then pay personal income tax.)
So what is the difference between an S corporation and an LLC? And which structure is right for you?
The answer depends on your own unique situation. If operational ease and flexibility are important to you, an LLC is a good choice. If you are looking to save on employment tax and your situation warrants it, an S corporation could work for you.
Business Ownership & Operation

There are restrictions on who can be owners (called “shareholders”) of an S corporation. An S corporation can have no more than 75 shareholders. None of the shareholders can be nonresident aliens. And shareholders cannot be other corporations or LLCs.
An S corporationis operated in the same way as a traditional C corp. An S corp. must follow the same formalities and record keeping procedures. The directors or officers of an S corp. manage the company. And an S corp has no flexibility in how profits are split up amongst its owners. The profits must be distributed according to the ratio of stock ownership, even if the owners may otherwise feel it is more equitable to distribute the profits differently.
LLCs offer greater flexibility in ownership and ease of operation. There are no restrictions on the ownership of an LLC. An LLC is simpler to operate because it is not subject to the formalities by which S corps must abide. An LLC can be member-managed, meaning that the owners run the company; or it can be manager-managed, with responsibility delegated to managers who may or may not be owners in the LLC.
And the owners of an LLC can distribute profits in the manner they see fit.
Let’s say, for example, you and a partner own an LLC. Your partner contributed $40,000 for capital. You only contributed $10,000 but you perform 90% of the work. The two of you decide that, in the interest of fairness, you will each share the profits 50/50. As an LLC you could do that; with an S corporation, however, you could only take 20% of the profits while your partner would take the other 80%.
Employment Tax: Savings vs. Paperwork

A major factor that differentiates an S corporation from an LLC is the employment tax that is paid on earnings. The owner of an LLC is considered to be self-employed and, as such, must pay a “self-employment tax” of 15.3% which goes toward social security and Medicare. The entire net income of the business is subject to self-employment tax.*
In an S corporation, only the salary paid to the employee-owner is subject to employment tax. The remaining income that is paid as a distribution is not subject to employment tax under IRS rules. Therefore, there is the potential to realize substantial employment tax savings. Case in point:
Mary owns a print shop. In keeping with the industry standard, Mary decides that a reasonable salary for a print shop manager is $35,000 and pays herself accordingly. Mary’s total earnings for the year are $60,000: $35,000 paid in salary and the remaining $25,000 paid as a distribution from the S corp. Mary’s total employment tax is $5,355 (15.3% of $35,000).
If Mary were the owner of an LLC, she would have to pay employment tax on the entire $60,000, equaling $9,180. But as an S corporation, she realizes savings of $3,825 in employment tax.
One might assume that these savings could be further manipulated by reducing the salary to an extremely low amount and attributing the rest of one’s earnings to distributions—but this would be an incorrect assumption. In practice, the IRS is careful to notice whether a salary is reasonable by industry standards. If it determines a salary to be unreasonable, the IRS will not hesitate to reclassify distributions as salary.
Still, while the potential employment tax savings may make the S corporation an attractive structure for your business, bear in mind that you would then have to deal with all the paperwork associated with payroll tax. The payroll tax is a pay-as-you-go tax that must be paid to the IRS regularly throughout the year--on time, or you will incur interest and penalties. The paperwork alone can be an overwhelming task for someone who is not familiar with this; and if you expect to incur losses or otherwise experience a cash flow crunch during the year that would hinder you from paying the payroll tax when due, this could present a problem.
Owners of LLCs pay their self-employment tax once a year on April 15 when income taxes are normally due. Income tax filings are also relatively easy for the owners of an LLC: A single-member LLC files the same 1040 tax return and Schedule C as a sole proprietor; partners in an LLC file the same 1065 partnership tax return as do owners of traditional partnerships.
The comparison chart below sums up the similarities and differences between the two business structures:
S Corporation Limited Liability Company
Liability Protection Yes Yes
Operational Control Board of Directors/Officers May be member-managed or manager-managed
Federal Income Tax Pass-through Pass-through
Flexibility/Ease of Operation No; subject to some formalities and record keeping rules as traditional C corps Yes
Ownership Restrictions Yes No
Flexibility in Profit-Sharing No Yes
Employment Tax Employment/payroll tax on salary; no employment tax on dividends paid to shareholders Self-employment tax on total net income *
There is no one, magical entity that works for everyone. A CPA or a specialized tax attorney can assist you in choosing the right structure for your business. The important thing is to consider the operational, legal and tax aspects of each structure as they apply to your unique situation.

* The self-employment tax rate for 2009 consists of two parts: 15.3% for social security and 2.9% for Medicare. In 2009, only the first $106,800 of total net income is subject to the social security portion of the tax. All of the the total net income is subject to the Medicare portion of the tax.
*For those who prefer the tax treatment of an S corp but like the simplicity of an LLC, there is an alternative worth considering: Forming an LLC that is taxed as an S corp. An LLC may make a special election with the IRS to be taxed as an S corp. This election is made on IRS Form 2553 and must be filed with the IRS before the 16th day of the third month of the tax year in which the election is to take effect.
An LLC that is taxed as an S corp is still a limited liability company from a legal standpoint (subject to the laws governing limited liability companies in the state of formation); however, for tax purposes it is treated as an S corp.
A word of caution: Certain nuances of S corp taxation can be confusing to some LLC owners, especially do-it-yourselfers and/or those who prepare their own tax returns; for example, an LLC owner might easily make the mistake of referring to an IRS publication that addresses LLCs when, in fact, such a publication would not apply to an LLC that is taxed as an S corp--and such an error could lead to negative tax consequences. It is therefore highly recommended that you consult a CPA or other qualified tax professional for advice and/or assistance.

anita,thank you for all you info on llc you are truely an assett to this forum,and it is always a pleasure to read your responce's you have answered alot of people's questions,and i cant wait to put this info to use .dale

Congrats to you Anita!

I'm new to all of this so let me make sure I understand...
You use the credit of an LLC to get loans?

You mentioned you can purchase one "seasoned". What are the expectations of one seasoned? Is it like an LLC that has received loans before and are in good standing?

Hello, I have an established LLC from 5 years ago, but its inactive. I called the treasures office to reinstate it but I thought I should start from scratch and change the entity to an corporation with new a new business name.. Would it have been best to operate under the LLC since it was established 5 years ago even though credit wasn't established?

Hi there I'm Mary-Jane (MJ) I too am from CA I am considering getting a LLC as well. Thanks for the advice your posts are always informative and very helpful to us all.

This Page on this site explains how to get $250k to $450k for real estate deals without credit Amazing!

http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...

This link on Dean's site explains how to get $250k to $450k for real estate deals without credit Amazing!

http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...

an scorp can hold llc s under it

SINCE U LIVE IN CALI HOW DO I SET UP AN LLC AND WHERE DID U GO. ALSO WHERE OR HOW DID U GET A CREDIT CARD FOR YOUR BUSINESS? WHERE DID U GO AND WHO DID U TALK TO. I WOULD LIKE TO START PURCHASING PROPERTIES UNDER AN LLC. CAN U GIVE ME YOUR CONNECTION THANKS. OH BY THE WAY U ARE VERY KNOWLEGEABLE.

We have taken the 3 day basic seminar and find this exceptional but we do not have the money to purchase the advanced packages. We are seeking a mentor to assist with analyzing opportunities, creative financing and putting a deal together. We are willing to joining or working one on one with a mentor to build our own team. We have some team members in our normal network, so building the team is not the problem. We need help with making a deal go from a possibility to a reality.

The whole idea behind these is to protect your personal assets and tax advantages and of course to build buisness credit. As far as buisness credit
yes it takes some time and if you mess it up even as far as changing your address and not contacting your state to tell them your back to sqaure one so
be careful or get profesional advise.As far as putting 5 homes into 1 llc if
someone gets hurt and insurance doesn't cover it they can go after all homes in the llc.If you don't put your buisness in an llc or scorp the goverment looks at it like a hobby and you can't write off alott of things like education milelage office equipment in the right portion. Go at this in a D.b.a and you will find all the money you spent on educational porposes can't be written off.llc are a little easier s corps take a little more work when you are a corporation you have to satisfy your state and goverment as far as monthly minutes and share holders meetings etc.

I would highly recommend you do not use a single LLC to hold multiple properties for a very good reason. If you ever are sued or have a judgement placed on your entity (LLC) It is on all the properties, not the one upon which the judgement has been placed. I had a friend who had this situation arise, a judgement, which meant he could not sell any of the properties until the judgement was satified.

LLCs in some states can be set up online, at the Secretary of State's website, for about $50. States like Utah, Colorado and others only take a couple of days to get done also. I recommend you call them the name of the propety for example the "231 S. Main Street, LLC or 123 Elm Street, LLC. This way you can keep track of them once you have several. Generally, you can file a DBA, "Doing Business As" in your own state and use an out of state LLC to buy and sell property where you live.

I hope this helps.

I bought my LLC two years ago from legal zoom on line and some how they mixed up the states. I'm live in Massachusetts and some how they put me in as living in Alabama. When I noticed 3 to 4 after I called and spoke to a adjuster "Alex" and he told me that it was fine ,I would be able to conduct business in my state,but did not tell me I would have to file in Alabama's IRS and plus I need a foreign "something" to conduct business in my state;now it's to late to change know, I was on them for about 6 months and nothing, well they finally asked me to call Secretary of State in Alabama. To make a long story short I got discoraged and really slacked on my investing plans. Please if anyone one has any info. in how I can fix this ,please write me on this site. Thank you

What If My Credit Is Bad Bad Bad , But I have A Partner how can I get Credit using A Partner on my LLC ?.

Cause I'm thinking of Getting A Partner To do A LLC with me & Then Establish My own LLC Once I can get my own credit history back in Good standing .

there are web sites that sell aged llc.up to 12 years.are they a scam

There are hundreds if not thousands of seasoned LLC for sale. There are companies that start, buy, and sell seasoned LLC's. If you are investing in real-estate full time and not just dabbling you MUST have some(not one, two, butsome)LLC's. For the purpose of tax breaks, and so you never runout of credit lines!

Thanks again everyone. I feed off your energies. I'm an investor who took a few years off trying to find my way back!

GENIUS

To do business in a state other than the one where they LLC is registered, you need to file a DBA. (Doing Business As) in the state where you intend to do business.
You can file this form and pay the fee and start doing business. Remember you are considered a Foreign Business (out of state), and will need to file for a State Tax ID in your state along with the EIN from the IRS you should be covered. Just remember they are trying to collect taxes and will be after you unless you do these things.

Just my two cents, worth. I was reading up on LLC's and I would suggest to anyone in California to set up one up in Nevada, far cheaper. I also asked an expert about aged or shelf LLC's and I was advised not to go for them because banks have issues with them(financial statements).

So my question here is; who has bought an aged LLC? did you have run into any issues with the banks when trying to get a loan?

hello hope that you are doing well.
i read your post on blc, and wonted to ask you.
if i can't use my p o box as my office address than how would i use it. i have no money to rent office space.

thank you
aaron.

It is an excellent idea to get LLC's especially when you can get a line of credit. One of my students uses his LLC's credit line to purchase property instead of using all of his bank credit.
Everyone in real estate investing should have and use their LLC's.Anita has a gret plan there and is one to follow and execute.
A couple of things to keep in mind are the members of an LLC in which the only activity is ownership and leasing of investment real property (rather than dealing in real estate as a business) are not subject to the self-employment tax. An LLC used for “trade or business” activities often subjects its members to self-employment tax.
The LLC can be owned by members who are corporations, trusts, or any other type of person or entity, without disturbing the tax status of the LLC. In contrast, an S corporation can lose its status as a pass-through entity if any shares of stock in the S corporation are transferred to a corporation or other type of person or entity not permitted as an S corporation shareholder.

Randy Bailiff