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Andrew Ikeda

Need help/advice with LLC

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Hello Michael;

 

As you already know, I am getting prepared to get into r.e. investing. Unless someone says something to the contrary, I am going to go the route of forming an LLC and want to do this before doing my first deal.

An attorney in Portland, OR quoted me $1,000 to set one up. However, I keep seeing all over the various websites that this can be done for less. Could you please advise me or steer me to some knowledgeable people or websites in regards to this?? Should I wait until I'm back in the states and find an attorney through a rei club? I have heard of 'do it yourself' LLC's, fees for under $200 etc but I dont know what to believe or make of all this.

Also, I will be shopping for a personal residence when I return to the states. Would you advise putting my personal residence into the LLC?

Again, thanks for your time and help.

 

Sincerely,

 

Andrew

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Andrew, forming an LLC does not usually require the services of an attorney. I did my own, (two actually), here in FL. It took all of five minutes online, at a total cost of about $125 each.

Most states have a similar setup, and you can start by going to Oregon's.

Once there, go to the Corporation Division page, or something similar, and you'll see what is involved in forming your LLC.

As for putting a personal residence into your LLC, there is no one correct answer. Everyone's personal situation can vary. This is an instance where an attorney or even a CPA would be worth a few bucks to determine what is best for you.

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Andrew,

 

The main purpose of an LLC is to shield our personal assets from a lawsuit arising out of our business activities. By putting your business assets in an LLC, your liability exposure to a lawsuit arising out of your business activities is limited to the assets owned by the business entity -- hence the name Limited Liability Company.

 

If you want to consider putting your personal residence into something, consider a revocable living trust. A properly drawn trust keeps the property out of probate and keeps other potential "heirs" from making a claim to your personal residence by challenging your will.

 

Dave T

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Hello Dave and Michael:

 

Thanks for the info. Ironically, I just read on a real estate/attorney/investors website about putting investment properties into LLC's and personal property into living trust(s). I am currently investigating/learning more on this.

Now, it's how does one properly set up a revocable living trust?

Last night I downloaded and read info on setting up an LLC from the WA state website. I have a question regarding the registered agent. Can I be the registered agent and use my sister's address while I am overseas? I'll back in the U.S on Feb 28 or March 1st but would like to get the process started. I thought of also starting the 'effective date' on March 1st, therefore not having to put my sister down as a registered agent. I will be the general partner so Im trying to take a short cut in order not to have to make an ammendment to the Secretary of State. Will any of this work? Would you recommend that I just wait until I return and then file?

Of course, I understand both of you are not lawyers but any tidbits or information would be much appreciated. Thanks. Sincerely, Andrew

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Andrew,

 

I think your question is a good one for that real estate/attorney/investors website. I believe he/she will tell you that the registered agent is an in-state occupant with a physical address where the agent can be served process.

 

If you want my opinion, I would just wait until you return to the states. You said your investment activity will not start until you return, so why the hurry to establish an LLC? Especially if you are setting up your LLC as a limited partnership. The partnership agreement is too important to do long distance between yourself and your limited partner(s). Your tax return may be a little easier if you establish your LLC as a single member, pass-through entity. Again, good questions to take to that other website.

 

Any lawyer in the state where the property is located, and versed in estate planning, can write a living trust for you. State laws vary and a generic trust from some do-it-yourself kit may be flawed when applied in your state. These forms should be treated as SAMPLES only and not intended as a substitute for legal, tax or financial advice.

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Guest Guest

Dave,

 

Thanks for the reply. Yes, I thought about asking the question to the lawyer.

The reason I would like to set up the LLC soon is so that if I buy property as soon as I get home I have something to put them into to protect them. Of course, I realize that I may not be able to buy anything for a while after I return but then again, maybe I'll get lucky. Part of my strategy is to contact FSBO's by e-mail just before I return and try to set up appointments. If I should be lucky enough to find a motivated seller, I'd like to have the LLC already set up so I dont have to scramble in the case the deal can be closed quickly.

When I file the LLC, it will be just me (single person entity) with the pass-though on the taxes.

Thanks for the info on the trusts!! Andrew

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You can take title in the name of a land trust should you happen upon a deal before your business entity is established. After your business entity is established, assign beneficial interest in your trust to your LLC.

 

The LLC does not have to hold title directly. Using a trust as a title holding vehicle provides some measure of anonymity. Assigning beneficial interest in the trust to your LLC, provides asset protection.

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Hi Dave:

 

Again, thanks for the advice. I will look into a trust when necessary. I think Ill have to contact a competent lawyer regarding this matter but thanks for pointing me in the right direction. Best wishes, Andrew

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Andrew I got this from a member of the protland investors club. The price might me alittle spendy for you.

;) Contact the Oregon Secretary of State Corporate Division office. 503-986-2200 Ask for Articles of Organization- Limited Liability Company form. Fill it out, Send it in with $20.00 and you are a LCC. Very simple.

 

 

Check it out Adrew and let us know how it went.

 

MichaelR :D

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MichaelR:

 

Thanks for the information. I'll be sure to copy it down. Umm...I actually live near Oregon but on the Washington side so I'll be doing the LLC in WA state.

I already got the ball rolling. It's $175 and I can delay the 'effective date' for 90 days from filing so it works perfect!! Application goes out in the mail today! ;)

If anyone out there is interested in WA state incorps, etc, the website address is: www.secstate.wa.gov/corps

Thanks again for your interest and help. I read about your phone calls and wish you the best!! Keep us posted on that too!

Have a great day!! Andrew

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