How To Create An LLC For Rental Properties (Asset Protection)
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- čas přidán 2. 08. 2024
- In this video, I share how to create an LLC for rental properties and provide some helpful tips. If you're interested in starting your own business and owning rental properties, you may be interested in learning how to create an LLC for rental properties.
Learn more about how to become anonymous AND appear as if you own nothing at our next Free Tax & Asset Protection Workshop. Save Your Seat: aba.link/945123
"When I set up the structure, one of the things I want to ensure is that the client is put in the positions where they have apparent authority over their limited liability company." 12:08
By creating an LLC for rental properties, you'll have a legal structure in place that will help protect your investment. You'll also be able to access the private equity market, which can help you grow your investment over time.
LLCs are a great way to protect your assets and keep your finances safe. By creating an LLC for your rental properties, you'll keep your money safe, and property owners will be in the hands of qualified individuals. This is a great way to start property investing and protect your assets!
An LLC is a popular way to structure and protect rental property investments. By creating an LLC for your real estate investments, you can protect yourself from liability, reduce taxes, and limit personal exposure to lawsuits.
If you want to start your own rental property business, this video is for you! I'll show you step-by-step how to create an LLC and how to fund your rental property through the LLC.
Watch our video to learn more about LLCs and how to use them to protect your rental property investments.
Like, comment, and subscribe to the channel for more great content like this! Enjoy and share this video with your friends!
Show Notes:
0:00 Intro
0:22 Location
3:32 Types of Entities
4:30 Anonymity
8:00 Creating New LLCs
11:48 Setting-Up
17:05 Outro
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ABOUT CLINT COONS
Clint Coons, Esq. is one of the founding partners of Anderson Law Group, Clint has grown his legal and tax firm to over 400 employees by assisting real estate investors with creating and implementing solid entity structuring plans. His success in these regards is in large part due to his personal investing experience. A successful attorney, real estate investor, and speaker, Clint has used his innovative and dynamic strategies coupled with knowledge borne from experience to help thousands of people save millions of dollars and build real wealth.
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
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Very good information! Thank you for explaining it so well. I have a quick question. What should someone do, if
- They live in California
- Have a rental property in TX
If Wyoming LLC is created, does this person has to file anything in California (resident state)? Business (rental property) is in TX.
This is the only video after watching a TON that addressed how to setup the management structure correctly...thank you
Awesome.
Outstanding job Gents!
Very knowledgable!!! Thank you
Thank you for video!!
Welcome!
this is s MUST SEE for people learning about real estate investing! thank you so much for clarifying all the points in this video!!
This has clarified the questions i have. Thank you so much!
Glad it was helpful!
Thanks for the great information
You bet!
Clint you’re great. Thanks a lot!
My pleasure!
@@ClintCoons Do you deal with non-US investors? (Im looking to invest and I really liked the strategies you have demonstrated to protect in/out assets and also save taxes. However in my case I want to make sure Im not saving on US taxes and at the same time pay in my country)
You a legend !!!! Thanks
😄
Your info is always greatly appreciated.
Glad you think so!
Great video as always! Could you explain how the Unrecorded Deed works to limit transfer tax if your property is in PA?
I'm looking to know as well.
How come you never talk about setting up an LLC in New York? I would love some information. I love your videos, I’m so happy I came across them.
Setting up a NY LLC is akin to setting up an LLC in Montana, you would set it up to hold property in the state of NY. The WY LLC will be its member. BTW NY just passed a transparency law requiring the disclosure of LLC members. Might want to consider a limited partnership in NY.
I have a sneaking suspicion that I will be using you folks' services in the future after I receive an inheritance of many properties via a trust. Yourself and Toby are giving master level classes on these topics that you cover.
Thanks
Good afternoon coach Clint
I need to make an appointment with you guys, I’m just starting to do short term rental and I had know idea this was a thing.
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/clintss
Hello Clint, been wstching a lot of ypur videos about LLC... I will be contacting you soon about my setting one up..
Fantastic!
Another great video Clint thank you for the information. Can you state another reason why Wyoming LLC holding company should be set up as a partnership other than being able to use income when applying for financing under the holding LLC. Trying to avoid schedule K fighting by setting up the Wyomi , single member LLC not to complicate my return
Reduce your risk of audit.
Clint, what type of LLC do you recommend to set up for property in the state of VA?
Thanks for posting Clint. What type of LLC do you recommend for residential rental property in Indiana?
I set mine up as member managed by my WY LLC.
Final question. The WY-LLC would you elect it for s-corp taxation if your doing more traditional sales out of the operating LLC? For real estate it may not make sense. But for companies with traditinal cash flow the s-corp election would be beneficial?
Yes that would traditionally make sense.
@ClintCoons I have watched quite a bit of your content. I am looking to purchase first rental in Texas. My understanding of your approach is to setup WY LLC with my wife and I creating a partnership (plan to add to portfolio), then create TX Series LLC. Purchase first property in our names, place in a Land Trust then move property to TX cell. If I have fully understood your recommendations? I have the cash to put down 25%-30% of down payment, but I rather put as little down as needed. Any recommendation on financing option? Great content!
Look for a DSCR loan
Thank you for such great informative videos! How would you set up an LLC in NY or NJ?
I would set it up as member managed by a WY LLC for anonymity.
Could you PLEASE do a video on the new transparency act BOI (starting 1/1/2024). What happens to anonymity for Delaware, Wyoming, Nevada and New Mexico? What are options to stay anonymous?
Here is my site: cta.andersonadvisors.com/
Your anonymity is still there in terms of private citizens or businesses trying to find you. The process for setting up a LLC involves you getting a EIN from the federal govt IRS department. Now with the new law a second government agency will know who you are. Anonymity is still there because the new law doesn't make your information available to the public only government agency.
Awesome video. I'm in Florida in a townhouse attached to 3 other townhouses & curious if I should do an LLC or Land Trust as i still pay a mortgage?
No question - a land trust
Thanks for this video. What if I had property abroad e.g. Thailand? What structure could be best for tax purposes?
Not sure. That would be country specific.
Hello Clint, I learned a lot from your videos, really appreciate you for sharing it, my husband and I currently owned few rental properties in FL in our one LLC, I also registered couple Wyoming LLCs in hand, the properties we own free and clear, shall we transfer them to different LLCs, or we should create land trust for each property?
Do you plan to pull any cash out of the properties? If so then I would use a separate land trust, otherwise I would move each property into a separate LLC held by a holding LLC. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Great video, If I have rental properties in Illinois and in Indiana with personal mortgage, what structural should I use? Do to transfer them with title insurance valid? thank you.
I would use separate LLCs held by a WY holding LLC. If your mortgages are not owned by Freddie or Fannie then you may also consider using a land trust.
Can you do a video about LLC rental property in Hawaii? How it works with the Wyoming LLC set up.
It is the same as any other state. I have used both in Hawaii and I prefer the land trust for my holding.
Would it be safe to safe to put my property in a land trust first then Wyoming LLC?
Excellent information, thank you! Please advise how not to trigger transfer tax moving property from the owner names - husband and wife to a SM LLC, property in Pennsylvania. Does the transfer to a land trust in PA sill triggers transfer tax in PA?
Yes it does. Only way is to use a pocket deed.
@@ClintCoons By pocket deed do you mean a deed notarized and put away for safe keeping to be used if the property has an adverse event?
Great video, new subscriber! I have just recently opened 2 LLCs to purchase properties subject to and have the LLCs become the owners. The LLCs are subsidiaries of a WY holding company who registers as the owner of the LLCs. I am in FL and based on your video i shouldve instead opened up Land Trusts and not LLCs is that correct? Will you please elaborate more? Thank you very much for your time
Who recommended you set up LLCs in FL to buy property subject to? Here is a video I released on FL structuring: czcams.com/video/yd0veAAngzk/video.html
Can you please make a video of the anonymity/asset protect set up for a 1st long term rental property in Alabama?
The strategy for AL is a WY LLC to own Wyoming Statutory Trust or land trust.
For the WY land trust, is the trustee going to be the WY LLC and myself the beneficiary?
Clint, thank you for this video. In AZ how do I transfer the property to an LLC? Do I create WY LLC first?
Set up a WY LLC for anonymity then create an AZ LLC to hold title to the property.
Clint, great stuff! Been leveraging your guidance as my wife and I start the journey. Have not made any purchases yet. As such, I have Wyoming LLC process started. Looking to make first purchase preferably in PA (close to home). Any recommendations on structure for PA LLC? You mentioned unrecorded deed, but I am not transferring anything in. I am thinking member managed, with my wife and I as officers. Thoughts?
Do you plan to use financing or cash?
@@ClintCoons - thanks for quick reply. Financing, probably portfolio lender.
Hi Clint, great video as always! I have a quick question, for a Missouri LLC owned by a Wyoming close llc would the Missouri LLC that the property is in, be better to have as a member-managed or manager-managed LLC, and why? Thank you!
Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide with you an answer that is unique to your situation. Visit: aba.link/e28eae
@@ClintCoons I have booked it. Look forward to speaking!
Hi Clint,
I would like to get some help setting up some LLC for asset protection. I live in CA and own multiple rental properties in 4 different states, 3 in CA Plus my primary home, 1 in WI, 1 in MI, and 1 in OK. What is the best way to file LLC for these?
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
For bank open account-should one Appoint self as president of the local Texas or state llc or the Wyoming parent llc
President of the TX LLC and manager of the WY LLC
With a property in FL I understand we create a land trust, deed the property into the land trust and make the WY LLC the beneficiary, but who should be the trustee? also the WY LLC?
Yes you should use a WY LLC as the trustee or a nominee trustee.
Hi Clint,
It's a great stuff man, appreciate your knowledge. My questions are
1. Can I do all this process from India hiring online services.
2. In which sector I should register my LLC, I mean is it necessary to register in Real Estate sector? or I can go for any other sector?
Kindly reply me. Thank you!
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/clintss
What about a debt free (mortgage free) rental property in Florida? Should you go with the Land Trust or LLC? Which is preferred and why?
If you have owned the property for more than 2 years, I would use a land trust to avoid the tax cap reset. If it is a new acquisition, an LLC would be my first choice.
If you have several building units on a piece of lot. Do you need the land to be under an llc, separate from the buildings so that in case of a lawsuit that occurs due to an accident on the land itself, i.e. sidewalk that it will not put you a risk of losing all the buildings on the lot?
Yes you do. A client was just sued over some kids riding quads on his vacant lot then injuring themselves.
You mentioned that when purchasing or transfering your deed in Pennsylvania, that you should use a un recorded deed to the out of state LLC. Would you please elaborate more on this with me.
its referred to as a pocket deed. When you transfer property via deed you are not obligated to record the deed to effectuate a legal transfer. The recording of the deed in PA will trigger a tax. To avoid the tax you can deed the property and then transfer all rents etc., to the LLC and hold off recording the deed until a lawsuit hits. Make sure you consult with an expert before using this technique.
@ClintCoons I had opened a Texas LLC before jumped on your powerful LLC structure lecture and now I opened WY LLC as holding LLC now, can I remove myself from the Texas LLC manager with replacing it with WY LLC or I should just open a new Texas LLC and use the one i opened earlier for something else that does not real estate? Thank you for your help.
Best to use the earlier LLC for something else since you are tied to the entity. This assumes you have not yet moved any property into the existing LLC. If you have then you might want to balance the work in moving the asset out and into the new TX LLC versus leaving as is.
Thank you so much for the reply, I really appreciate it.@@ClintCoons
would the texas series LLC in the example have to be filed and renewed by a different person as well for anonymity?
The TX series is owned by the WY LLC.
If we aren't pro investors who rely on debt financing, is it better to treat the Wyoming LLC as Disregarded and avoid the hassle of tax filing? Also if we have property in Iowa, is an Iowa LLC a good substitute for the Wyoming LLC?
Yes if you do not want to file a tax return that is how it would be done but I would not substitute IA for WY.
Would you recommend these same structures for Commercial Real Estate, instead of residential?
Yes - one LLC per property.
Does my Wyoming LLC holding company have to have physical location in WY in order to get the full protections of a Wyoming LLC? Or is having my registered agent in Wyoming enough?
If an attorney pressed you on where the WY LLC is located e.g. its business address, where are the records kept, mail received, and you said "my home state" it weakens the argument your LLC is truly based out of WY.
@@ClintCoons okay thank. But what about a judge in a court room during a lawsuit and they somehow break the corporate veil? Do u think they would normally treat it as a regular WY LLC? Cuz what’s the point of getting a WY LLC if they’re not going to treat it like that other than for anonymity?
If I am buying property in Kentucky, would I make the KY llc member managed or manager managed? (obviously WY llc is the sole member). In the case of Ohio, despite Ohio not collecting info on managers, couldn’t you still just make it member managed and list yourself as an officer in op agreement just like you did with North Carolina? What is the benefit to being the manager over being an officer?
I would make the OH manager managed because it is more common to see managers versus officers in LLC. With the KY LLC, I would do the same.
I have two rental properties one in AZ, one in CA. What would be the best route for these two properties.
I'm in a similar situation. Have you figured yours out?
I also have the same question for Arizona
What should we do if 5 friends that bought property together under just one owner 15 years ago to protect us if something happened to one of us. What would happen to our portion? How to make sure it would go to our spouses. What type of lawyer do we need?
Whoa yes this is a major issue that might end in disaster. You definitely need to set up a JV LLC to protect yourself. If the owner is sued you will most likely lose your investment. We can help. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
How would set an llc in MA?
Clint, if I put my wifes primary home under our LLC as a pocket deed, can I claim depreciation? It is a rental property.
If the home is a rental /investment property then yes you are entitled to claim depreciation.
Hey im just starting in wichita, ks. Maize area specifically, my properties willl be owned off of loans. Is there anything different i need to do or not do using the landtrust method? Given of course every state has its own laws/rules?
Not at all. Best of success and congrats with starting your investing.
You didn't go into more detail about transferring a property in PA to an LLC using an unrecorded deed. Would appreciate the info as i am considering purchase a rental property in Stat College area.
I am interested as well. Own property in Johnstown PA in a land trust
As a CA resident if I create a WST. can I put my CA income property under the WST with a warranty deed?
Yes you can
When setting up a LLC for anonymity, how do you handle office infra-structure such as applying for accounts (i.e. phone, Internet) if you don't want your name out there?
Under the name of the business. My phone lines are in my business name.
in WA, it seems like I have to list someone as the governor of the LLC. I listed myself and it shows up in the public records in the database. Are you able to form a WA LLC without listing yourself as the governor?
Yes - we do it all the time.
You would list yourself in the operating agreement as "an Officer/President" ....where? On the parent LLC or the Wyoming LLC???
On the operating LLC not the WY LLC.
Clint - do you think that anonymity is important when an investor is investing only in triple net leased properties?
Absolutely. Do you want the tenants to know you are the owner?
@@ClintCoons In a ground lease NNN scenario where the tenant is responsible for upkeep of the property and builds and maintains their own building, I don't see much liability risk to the landlord. Of course, I am not a lawyer, and I truly appreciate your advice and insight.
If the blue box (WYoming LLC) is a single member LLC, what tax return do you file?
Just your 1040
I live in Maryland and would like t make LLC
I currently own a property and am buying the one next door i am a cash buyer I want to protect myself from any liability .I need to do by next month something
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
What kind of llc do you need?
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
What about a mobile home icant find a single video that explain mobile homes adding it to a LLC , and what's the benefit? And I'm just saying mobile homes not parks ,if can do a video like this I would apretiated
Noted and will make it today.
Didnt you say if youre renting the property the LLC should be registered in the state?
Yes.
@clintcoons, I have a CA LLC to buy a property in CA, this is a single member LLC owned by a WY LLC. I am the Chief Executive Member in that WY LLC (along with my wife as the other member in the WY LLC). When I am buying the actual property, how should the escrow documents be signed ? The escrow company wants a person name be the signer. This is all cash, no mortgage. Thanks
Your buying LLC should appoint you as a president to sign on your real estate deals.
@@ClintCoons thanks, I assume that appointment is part of the operating agreement of the CA LLC?
@@user-do3pm4po6l Yes it is
How abt NYC??
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/clintss
Who would I hire to set up an LLC based in WY on my behalf?
@manutexas
Thanks. If you would like to learn more you can register for one of our upcoming Livestream 1-day Tax and Asset Protection Classes for Real Estate Investors. Here is the link: aba.link/CZcamsAP.
Hello Clint do you setup LLC's for Washington DC.
Yes we do. Standard and Series. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Maybe someone can help me out. My brother and I are planing to start buying rental properties. We both are veterans and are trying to use our va home loan. My brother is a loan officer. He told me we need to have an LLC for at least 2 years. So im trying to open it now. So when i graduate from school, it would be 2 years. My questions is, Do i need to have a business already or anything else? Or can I just make an LLC and set it up and forget about it until the 2 years are up. I know there’s still a couple requirements to keep the LLC up and running.
I recommend registering for a complimentary consultation with my team. We'll tailor our advice to your specific needs. Sign up here: aba.link/e28eae
You can buy now older company called Shelf corporation (someone started it and never used it).
Can be 2 to 5 years old and that will save you the waiting and open doors for financing.
I did it several times...
Can I buy a property with an llc I opened a few months ago?
Without it 2 years of proof of income???
If you obtain a DSCR loan it is possible.
Great video! How would you set up an LLC in AL?
I would set it up as a SMLLC member managed by a WY LLC.
You mean set it up as Wyoming LLC? Thank you for your response! @@ClintCoons
When does Form 1065 kick in with these setups? If you setup a single member LLC in (most states) and it's owned by Wyoming do you then need Form 1065? I wouldn't think so because it's still single member owned. how do you treat Wyoming as a partnership?
Form 1065 is a tax return that is filed by partnerships, limited liability companies (LLCs) with multiple members. A single-member LLC is not required to file Form 1065, because the entity is not eligible for partnership treatment when it only has one member.
To treat a Wyoming LLC as a partnership, the LLC would need to have at least two members. The members can be individuals or an individual and another business entity like an LLC taxed as a corporation.
@@ClintCoons Is it best to set it up as a Partnership if you have a Spouse, or should you still consider Single-Member LLC on Wyoming?
@@cryptonoob9807 I depends on the state where you live if it is even an option and what is the purpose of the LLC. So unfortunately it depends.
Hi Steve, How much does it cost to set up a WY LLC, Hawaii and Washington state LLC with multiple owners?
Can I set up a series LLC in PA for real estate?
Do you work with European Clients? I am planning opening a company in The Netherlands and Switzerland
Yes we have offices in Europe. Email me at ccoons@andersonadvisors.com and I will make a referral.
@@ClintCoons I am going to do that, Thank you for you quick respond.
On a series LLC state like TX or TN, is it still good to put the properties in a Land Trust first, then into the Series LLC and the WY LLC? My first concern is estate planning - make it easier for my kids when I’m gone and also for potential equity or refinance loans.
The land trust does not impact your estate planning, it is a living trust that you should be focused on. The living trust will hold all of your assets and bypass probate. The structuring you described can be set up that way and is often used when investors are concerned about the due on sale clause.
@@ClintCoons Can land trust be put inside a living trust to bypass probate in FL?
@@samgrieg2542 Yes
Hi,
Is it better to form an LLC as a LP investor or investing under personal is fine?
Thank you~
I like to use an LLC to protect my distributions from possible personal creditors.
Hello Clint. I live in CA. I want to setup an LLC to start an internet business. I want anonymity and eliminate the $800/yr fee.
Can I apply this real estate structure you talked about?
I'll setup a WY LLC put that into a WST and list the WST as memeber on my CA LLC??
Will this structure give me anonymity and eliminate the yearly fee?
Unfortunately in your situation you will be paying taxes in CA. You can set the business up with anonymity but you cant avoid the franchise tax in CA
How can I contact you to help me with this
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
What about the new federal reporting requirements? How did it change anonymity?
It hasn't. Check out my channel for the corporate transparency act.
Hi.. Same applies to Mass & Rhode Island?
Yes, absolutely but you need to paper file in Mass to get the anonymity.
@@ClintCoons Awesome.. Thank you!
If a WY is the trustee of a land trust in Florida, does it need to be registered as a foreign corporation in FL, if the property will generate income as rental?
No, unless it is collecting rents.
@@ClintCoons the trust will collect rent with the beneficiary LLC, but trustee is on title
@@ClintCoons in that case does it need to be registered in Florida?
@@adriancos6834 yes
I revise my answer to no. I misread your comment. The Trustee is not collecting rents so it should not have to register.
The best Lawyer for Real Estate in the USA
Thanks. 😀
GREAT video new subscriber!!!! What about NV. Can I do an LLC? I have two properties, one in FL and the other in NV. I will create a land trust in FLL as your video suggested and tie it back to Wyoming. Should I do an LLC for NV? @clintCoons
Set up a member managed NV LLC that is held by your WY LLC
One Question? I Know the NM is weak about the SUE, but in the case of the Florida and Ohio can You put the NM how the Manager because NOT ask for the Manager how WY,ok?and the advantage is do not need take the annual FEE,(U$60) only need the Registered Agent and This can to be the Anderson Company ok?
Yes you can.