Tenants dont need to know who the owner is. Like you said, they could sue the LLC itself, but generally the owner of the LLC isnt a matter they should be concern with and if the LLC is structured correctly, no one will know unless a court order is granted to have the managers of the LLC turn over the operating agreement listing the members, which is unlikely to happen unless there is some form of fraud going on.
randombytes -- look at www.congress.gov/bill/116th-congress/house-bill/2513 and google "Corporate Transparency Act, H.R. 2513", if lawmakers have their way, every foreign and domestic beneficial owner of new LLCs will be required to have their information on file, and will also be required to have yearly reporting to FinCEN. As you can see, it has passed the House already... it may become law soon...
Great information; I'm getting back into real estate investing after taking a few years off, so this is some good information to know. I read an asset protection book by Bill Bronchick years ago, but this information is right up there regarding it's value. Thanks!
This gives me a fantastic starting point! Thanks for the video. Bought my first home a little over a year ago and looking at investment properties next.
This video is amazing!! The kind of information that should be incorporated in the beginning of a persons real estate journey but is usually learned near the end. Thank you so much for this free information!
@@ClintCoons@ClintCoons If you are setting up a Louisiana entity, they ask who the member is, member-managed or Manager-managed. I have a WY Holding but 2 LLCs in Louisiana. 1 is the asset, with the Member and member manager being the WY holding, and the 2nd one is the property management member being WY holding, and the manager managed in my name. Is this structure correct? lt asks if the LA LLC business is a corporation or partnership. Since the WY holding is the owner . Is it considered a partnership or corporation? My husband and I are on the WY holding. It can get confusing.
Great video. What if the tenant already knows who the owner is. Also these days one can get to know who the previous owner is (if converted from a person's name to an entity). In that case is the damage already done. The LLC can give asset protection still, so that is good to have, but the anonymity part is not there.
I’ve been wanting to invest in Real Estates and learned I should create an LLC, I live in WA. Thank god you’re the first video when you type “how to create an LLC” , because I would have never thought about the anonymity thing ! Genius ! I subscribe !
would it make sense to create a Wyoming llc for anonymity purposes and then put my commercial properties under Delaware ? or should they all be Delaware?
For example: Holdings WY LLC owns -> REI ND LLC REI ND LLC owns -> Big Fargo Apartments Trust Big Fargo Apartments Trust owns -> 150 Unit Apartment building
You could set it up as you described but with a commercial property it is often simpler to just hold the property directly in the IN LLC and avoid the land trust.
I freaking love this! Thanks! I live in NJ and have been on the fence about starting a RE Holding company (just couldn’t think of a name). Was thinking of referencing my personal name but now I know that’s not a good idea.. but this plan here is genius!
I’m in real estate too and this type of looking at it is just so predatory. Not making llc but your whole demeanor about interacting with tenants… this is why people call landlords slum lords
Just stumbled across this video and it is right on time. Thank you for this very valuable info. I am setting up my first 2 LLCs this month. The first is for residential rental properties. Single family home/townhomes, and duplexes. I would like to take your advice and set up a Wyoming holding LLC. If my first rental property is in Washington DC and I anticipate buying more in VA, where should I set up the LLC, VA or DC? or do I need to do both? Thanks
Depends. If you want anonymity then I would suggest setting up a WY LLC to own your VA/DC LLCs. So the first LLC is the WY LLC. Second, if you do not know where you are going to purchase your next investment property, but if you are convinced you will be investing in both states going forward, set up an LLC in each state. If you plan to use traditional financing to purchase the property then you can wait on the LLC because you will probably not be permitted to close in the name of the LLC.
@@dariuspasilaban802 Anytime will work if you are using the right loan product. If you want to close in an LLC look for nonqualified mortgage I.e., not freddie/fannie
Awesome! Thank you. I liked & subscribe within the first minute. I have a question... Can I buy property in any state with my Wyoming LLC. Or do I need to create an additional LLC. in that state (under the Wyoming one) to do business?
Yes you can but if you want anonymity and to avoid the filing of your WY LLC in the state where you are purchasing the property then I like to set up a state specific LLC for the real estate that is owned by my WY LLC.
Two questions: 1. New Mexico also has anonymous LLCs, can I use that as my holding LLC for single home rentals? 2. Let’s say for example if I only plan to buy one rental property in California and do not plan on buying any more rental properties… do I still need a second LLC apart from the holding LLC in Wyoming? In other words do I need two LLCs if I only plan to have one rental property? Excellent content
I prefer to use WY over NM because WY has charging order protections that are stronger than NM. If you only plan to purchase one rental maybe consider a land trust to a WY LLC.
Clint, although you maintain anonymity in the WYLLC, you will lose anonymity when you use the TXLLC or NYLLC to purchase properties as single member. Because being SMLLC you are also the manager who signs the paperwork, and your name goes on public records at closing. You are clever in front, but in the end, you still lose anonymity in the deed. The deed is public record. A clever lawyer working with the creditor is no dummy. Did I miss something??
The thing is, youre signing as Manager. Not as a Member. Furthermore, you can have someone be an [acting] manager on behalf of the WY LLC to sign those documents when forming a TX or NY LLC and even signing the deed on behalf of the LLC, in which case you could appoint yourself as manager of those LLC afterwards and have such manager resign thus giving you anonymity and since its an LLC, it can have any authorized officer or agent of the LLC perform actions on the property (including selling) in the name of the LLC.
@@brandonkeeler475 Clint has talked about doing that by using a Land Trust that is owned by the non-WY LLC. But now you are saying we can get anonymity without using a Land Trust. I wonder what Clint would say about this conflicting information.
Great video. I live in CA, have only one rental house, and my question is: If I DON'T set up a CA LLC, but instead set up only a WY LLC registered as a foreign entity holding my CA rental, would I benefit from the outside COP and anonymity of the WY LLC, or would CA cancel all this out? Thanks in advance.
I just went the Wyoming dept of the secretary of state. I did a query under "Search for business names/filings" I typed real estate to find companies that had real estate in the title of their name. At the very bottom of the page there is a designation for parties. When I clicked on parties it gave me the name of the organizer of the LLC. After watching this video, you said that the owner/organizer is anonymous.
The problem with the Wyoming Llc and Oklahoma llc and the Utah's is the for example in NY state you after your first property you have to use a local llc, which does give your data away once your file for one and check the DOS. So how do you go around that? Trust?
I never heard of that being a thing and would like you to provide sources, including ny statutes what states that, but even then, you can still own the NY LLC with a WY LLC or UT LLC or any other LLC in another state.
I plan on investing primarily in Commercial Real Estate and Residential, why a DE LLC instead of a WY LLC? Pros/Cons? What's the difference between the two states? What if I want to invest in both? WY LLC or DE LLC?
Typically I use DE for commercial and WY as my holding LLC for residential. DE is more expensive but is well received when working with portfolio lenders.
Clint, what if I’m starting a diversified company that has multiple offerings. Let me explain. I’m a pastor, which has its own challenges. I also want to develop a consulting business, own real estate, and potentially have a variety of small service businesses and possibly a franchise or two. How should proceed?
Even, If the property is a small California Multi housing apt? ie: 10 unit or less? That may not be expanded anymore? ie: other RE property acquisition? I was thinking a Nevada LLC for proximity to ms & lower fees?
Even please contact us for a strategy session: aba.link/30minSession . We use special strategies for California investors to minimize the franchise taxes. NV is not necessarily that much lower and you need to consider how the property is managed.
First, I'd like to compliment you on being such a fine avid lecturer. Now, how do you get around the requirement of having to register with a physical address in Wyoming? According to the Secretary of State a PO Box is only acceptable in addition to a physical address.
Thanks for the compliment. Great question. We have an office in WY and provide a physical address for every WY entity we create. You ned to work with a business located in WY to serve as your resident agent.
Clint, you’re a great speaker! I’m looking at buying rental properties in Indiana, Tennessee and Texas. Both single family houses and multi-family properties. How do I structure that with a Wyoming and Delaware LLC first and then an LLC in whatever state I buy the properties?
Since you are looking to invest in multi and single I would opt for DE. However, if you are buying in TN you must be very careful how you create your structure so you do not run subject yourself to the TN Franchise tax. If you would like a FREE 30-minute consultation, you can request one here - aba.link/30minSession
What if I'm a Florida resident for example.? When i form the holding entity wouldn't i have to use my Florida address when requesting its EIN? Would that create nexus in Florida? Then I'd have to register the holding to do business in Florida and I'd lose anonimity.
Or should i just use a "virtual address" from Delaware (for example) as a "principal address"? I guess those addresses are flagged in some way because of so many businesses using it. I mean, anyone doing illegal stuff would use those addresses. And obviously i wouldn't want to be linked in any way to those businesses
Hi Clint thanks for your answer. I'm referring to a holding company in Delaware that only holds an operating entity in Florida its child company is a Florida LLC which operates in Florida. (ecommerce) what address should i use for the holding company in Delaware when requesting the EIN? I'm a Florida resident and member of the holding entity (member managed)
Say you have a building that's technically a residence but it's divided in to 2 units. Is that now considered a multi-unit rental? And here's another: Say one building is a big garage on the bottom but has 2 rentals on the top? Thanks.
Depends on the type of property. If you are looking at residential and a freddie/fannie product you can not get financing with the LLC you will need to take title in your own name and then transfer into the LLC. If you are dealing with a commercial property then you can close in the LLC with financing. One last point if you establish a banking relationship with a portfolio lender then you may be able to close on residential in a LLC.
Something I keep running in circles about is with the WY LLC. As far as the general public, it's all hidden and as for the IRS, for example, it isn't hidden. In fact, you you must put who ultimately owns/controls the LLC, right? Well, the issue I keep going back and forth on is, what is it that the business does? Technically, the WY holding company does just that, holds the other companies, so is it what does the LLC ultimately do? When you get asked "what is the business of the LLC?", what do you answer? For the IRS for example, there's no holding option, so would it be "other"?
You mentioned you are manager & member of the WY LLC. When you register this WY Holding LLC, you choose Manager Managed. Also do you put your Name as the Member of this LLC as well.
Clint, with all these LLCs pointing to the first LLC, how do you properly sign documents. How would you sign say for the TX LLC if the WY LLC is the single member of that LLC?
@@ClintCoons Hi Clint, thank you for all the great detailed videos! I've been watching many of them and the same question as Dave. I own (1) rental property (single family), however looking to grow to eventually have both residential and commercial (multi-family, storage, etc), which state is best to use for the holding company, DE or WY since the assets would be a mix of residential and commercial. Thank you again for all the great videos!
@@bradct89 I did not mean to imply that lenders prefer WY just it is not a factor because you are not typically closing in a LLC when financing residential real estate. Commercial deals are closed in LLCs and lenders do feel more comfortable with DE over NV or WY.
Thank you for sharing this info. I used to create an llc using an online website for some other purpose and it was done quickly, but I wonder what documents could prove that I am the 100% owner of this LLC? If the state doesn't know who the owner is, and if one day some random guy steps up to claim that this is his LLC, then what can I do?
Operating agreement, bank account, EIN letter from the IRS are just a few. Sometimes we are asked to provide an attorney letter for our clients verifying they are the members of the LLC.
I would have a holding LLC in WY and possibly a DE LLC for the multifamily depending on the size of the loan and and my plans for the multifamily i.e., portfolio investment or value add.
What if I am only purchasing for re-sell Tax deed delinquent properties all over the country? That could be Land/ Residential Lots/houses, apartments etc!
So if I live in Georgia and plan on doing business in Georgia wouldn’t I need a LLC in Georgia? I don’t want people to know I’m the owner so how would that work?
So in this example of Wyoming and Texas LLC, if you were intending to do real estate business in Texas, which LLC would it make sense to build business credit with? Both of them? Does business credit carry between the parent/child LLCs?
If the Wyoming LLC is the holding LLC to umbrella all other LLCs under, should you treat it like all the other LLCs as far as opening up a business account and establishing business credit. And should you use a different LLC for rentals and house flips?
Hi, trying to schedule 30 min free consultation on the site from link in the video and getting error: Please review the error(s) below. 1. Create Lead - Main Lead Source: bad value for restricted picklist field: OnlineMarketing
I was looking into starting an Airbnb business by using rental properties (mostly studio apartments) what would be the best state LLC to start with? I loved this video, very informative
Typically you would set up the LLC in the state where the property is located. If you want anonymity then you could might start with a Wyoming LLC as the member.
I have a question as I'm new to real estate investing. I have an EIN for my holding LLC (in WY), but don't have an EIN for my new LLC (in FL) which will be purchasing property. Do I need a new EIN for that FL LLC that will be purchasing real estate?
I saw that you had asked the exact same questions I have had. Congrats on your purchases and endeavor in this business. May I ask, did you first form that WY LLC and later put other new purchases in other states under the WY? All these paperwork seems so complicated; were you able to handle all without the lawyer? Thanks.
Great info Clint! I created a WY LLC (holding company) which will own the LLC that owns one of my rentals. However, when I attempted to create a KY LLC to own the rental, KY does not allow business entities to be LLC members. Am I doing this incorrectly?
Love your content!! When signing as the manager of the TX LLC in your example because the signature block will be kind of long and referencing two LLC's in different states, should the state the LLC is formed be added after each LLC name? example; Bob Smith, Manager ABC, LLC a Texas company, on behalf of XYZ, LLC a Wyoming company. or can we just leave the states out of the signature?
He explains this in another video. You have the right to evict from the LLC local to your state (so not the Wyoming LLC). If you only had the Wyoming LLC, then yes you're right, you couldn't evict. But since we set up an LLC in the operating state as a member managed LLC, you have the right to evict.
Not really. You can still act as the Manager of the LLC that is a subsidiary without giving away that you indirectly own it through a parent company. You could also hire someone to be the property manager who would act in regards to that property, including evicting tenants.
