I totally agree that LLCs are a smart strategy for real estate investing. I would suggest caution in terms of setting up a holding company LLC. We have one LLC that owns a mixed use commercial building and we can use that for our K-1 tax reporting. If we were to add a holding company, that would add complexity and cost to our annual tax returns. From what I understand, a holding company LLC adds another layer of legal protection but it does so at a cost
The holding LLC is typically used for annuity and/or to consolidate ownership of multiple LLCs. In your example if you have a commercial loan and the lender asks for copies of your annual tax return you must approach the holding LLC with caution so as not to throw off how the return looks when presented to your lender. Thanks for the great contribution.
Dear Clint, you are amazing and I am your big fan. I appreciate your honest and thorough videos, here is my honest advice I wish you would also add your child company or services to find great investment rental properties with tenant management services included, I can see if you add that you will have largest empire ever in this business ever made!
After 4 years of investing full time I am told to “go back to work” by the lenders in order to get financing. This video really helps me learn how to structure my business to qualify for lending and take it to the next level. Thanks again!
This is great information!!! My only question: When you want to transfer funds from the K-1 rental income account, do you have to transfer it first to one of the LLC's that it owns, then transfer the funds to your personal account? Or can I just transfer it straight to my personal account two months in advance. My second Question: If I do not have a second partner to create the K-1 account, what other alternatives do I have?
So true! My experience, once the LLC is introduced in a conventional loan application, they need all the information on the LLC assets and taxes. Much better to avoid
Great content Clint. I only wish I had watched these videos before purchasing my first investment property in my own name. The property is located in Atlanta, Georgia and was purchased using a traditional loan. The original lender sold my loan to Stern Lending. Now that I have an LLC created, I have requested a transfer from my lender. Stern does not want to transfer the loan and has suggested this I refinance. I’ve also scheduled a consultation with a business attorney but do you have any advice to offer me?
If you move your property into an LLC it would be very unlikely if the lender is willing to assign the mortgage. My recommendation would be to move the property into the LLC and leave the lender out of the equation. Could the lender accelerate your loan if it is discovered? Yes but I rarely see lenders take this type of action unless the borrower has missed payments etc.. Another idea is a land trust for your property then transfer the land trust into the LLC.
I just purchased my first rental units and I'm not sure what type of llc to open I plan to buy another within 2 years I would love to talk to you furthermore and perhaps get one set up. Where may I be able to reach you??
How can a general partnership be setup such that one partner (of two) retains their annual qualification for medicaid as the general partnership earns a profit on interest on private money loans throughout the year?
Thanks Clint for the great info. If I am buying only one investment property with a group of investor friends and getting conventional loan under only my name, should I still need a holding company in addition to the LLC that I create in the state where I buy?
Thanks for the input , I have an LLC for the pass 4 years and don’t know how to use it , yes I just refinance and it got a little frustrating for what they asked for , thanks for the 411
I was following your advise and got confused at the end. If we have a partnership WY holding LLC, and individual in-state LLCs, if we want to expand, should we get the loan in the name of the holding?
The loan would need to be taken in the property holding LLC, most likely, unless you're looking for a portfolio loan that will cover several of the properties.
They are pretty much the same but lenders on larger deals often prefer DE over other states. It really comes down to the state that has more entity case law and DE wins hands down.
My lender will not let me deed the property into an LLC without the risk of the Due on Sale clause. Should I deed it over anyway or use another form of liability protection? PLEASE HELP
This is a personal decision. Most of my clients do deed their property into a LLC for asset protection and if the lender later notifies them of a concern - they pull the property out.
Real Estate Asset Protection In another video I thought you said you would title the property in a trust, then assign the LLC as beneficiary of the trust? Or something like that? And that using a trust this way is legal and the lender can’t do anything about this, correct?
im planning to invest in short term rental log homes , im looking at smoky montain area ... how do i lear n weather Tenn or NC is the better state llc/taxes and laws
I invest in NC and I can attest that the property taxes where I invest are very low. A solution would be to join reia's in each state and speak with other investors.
Funny you should ask: www.amazon.com/Asset-Protection-Real-Estate-Investors/dp/0979786045/ref=sr_1_2?keywords=asset+protection+real+estate+investors&qid=1574485533&sr=8-2
Clint, you always have great videos and seem very knowledgeable. I have a number of rental properties and it’s on my list to get more organized. How do I contact you for further services? Oh I just read the top of the video discription. I see you have it all listed there. I should be in touch Thanks Mike
@@oleopathic Sure insurance is important in your overall plan. The LLC is added protection. For example, if you default on a loan your insurance will not cover you. There are many exclusions to policies that people are not aware of until a claim is filed.
You can open your bank account anywhere for your WY LLC but the flipping side of the question - you can but it will depend on how involved you will be in the flip. Sometimes anonymity can work against you making it more difficult to run your active business. If you would like a FREE 30-minute consultation, you can request one here - aba.link/30minSession
Won't you get hit with taxes upon distribution from an LLC ? Also, won't your tax bracket slide up a notch if you're a W-2 employee outside of lending?
Distributions have no relation to taxes unless your LLC is set up as a C-corporation. The only time you have income from an LLC is when the LLC has generated income. (Again this does not apply to C-corporations). Yes your income tax bracket will go up the more you make at your W-2 job.
@@2_572 Once you have the capital, like me I had no capital, but got a loan from Bank through the help of Mrs Doris, she is a staff , the interest rate was 3% and pay back time is 3years
Thanks for the question. Just gave me an idea for another video. If you would like a free copy of my book "Asset Protection for Real Estate Investors" email my assistant Deborah Lewis - dlewis@andersonadvisors.com.
I tried to get a loan in my name but they said I would have to get an investment loan since I was not intending to live there. I did not want to lie in the application where they asked about intended use.
If you go with the holding company / partnership scenario, do you still hold the investment funds in the holding company, and then transfer them down to personal when required 2 months in advance or does that change?
Great information, thank you. In the first scenario with the 20k, after seasoning in my personal account is the loan made to me personally or will the loan and deed be in the name of the LLC and I am just making the down payment for the LLC?
Thanks do you have a video or info if I’m putting down the 20K and using a hard money lenders money to purchase the property - how to set up the LLC - is it the same process?
Isn't just putting money in another entity account, albeit a WY LLC, not technically protected because they ask you about your assets when being sued? And the idea of what's hidden can be found therefore not really protected? And taking a distribution could create a tax? And putting funds in and out of personal entities / accounts considered co-mingling which allows the corp veil to be pierced?
@@ClintCoons Thanks. What about putting funds in and out of personal entities / accounts considered co-mingling which allows the corp veil to be pierced?
How/where is the $160K in the WY LLC held in this scenario? Do you have to create a business accounting in WY because the LLC is in WY? Also you mentioned privacy through the WY partnership. What are your thoughts on using a company as the registered agent for the local state LLC removing the owners name from public records? Is that a coo work around to avoid the partnership WY LLC?
The cash is held in the LLC's bank account. You do not need to open a bank account in WY you can open it locally for your WY LLC. Yes when we file the LLC we serve as the resident agent for the WY LLC to keep our client's information private.
What if you want to name the LLC after the address of the rental property which is usually a standard? Example 123 Birdview St, LLC. In this case you are not going to create a LLC on a property you might not be able to close on plus the two months of income will not be possible. Please advise.
@@ClintCoons Help me to understand. I transfer the 20-25% downpayment to my personal account and let it sit there for 60 days. I put in an offer for 123 Birdview St which the buyer accepts and then I tell my bank I would like to put it in an LLC? Granted, I don't have the LLC created since I want it to match the street address. The fastest an LLC can be created is in 2-5 business days according to LegalZoom. I can stall the closing processes until 123 Birdview St, LLC. is created?
No. Co-mingling occurs when you use business assets to pay for personal expenses and you do not have a system in place to track reimbursements etc. Have good books is very important when it comes to a claim of co-mingling assets.
I bought my rent houses through my LLC and I’m a sole proprietor. I’m not sure how you got “traditional” loans by “seasoning” personal accounts because my mortgages and insurance won’t allow rentals through that avenue unless I lived in property for over a year first. What did I miss?
I am discussing seasoning money for a new purchase where you are purchasing in your own name i.e. ,a freddie or fannie conforming loan would require you take title in your own name and have seasoned funds for the down.
Hey Clint my question is if I create a holding LLC let's say out of Wyoming and I plan to use traditional financing should I create another LLC from the state in which I plan on buying the properties under the holding LLC to finance my properties?
good question, I’m planning on financing the property through the LLC from the state in which I plan on buying. Is this practical ? Will I achieve anonymity this way ?
@@vvsblk4594 Yes you can finance if you find the right lender. Most brokers will only finance residential in your name then you will deed the property into the LLC
@@ClintCoons if I buy the property in my own name and then deed into the LLC is this voiding anonymity ? And are there other ways to finance real estate using business credit where i personally remain anonymous?
@@vvsblk4594 Deeding it to your LLC does not void your anonymity but you are in the chain of title. If you use a quitclaim deed then this is a concern that will look suspicious so always use a warranty deed.
Yes you can purchase a multifamily provided you live in one of the units and it is not more than 4 units in total. Yes you can transfer the property to an LLC but it does violate the Guaranteed Loan and Assumption Policy Rider you signed when taking out the loan I.e., due on sale clause. Does this imply your loan will be accelerated - probably not but its always a possibility. This is type of clause is standard in most residential mortgages and is rarely enforced. If concurred, I like to use land trusts to hold title.
I am about to purchase my first home using fha financing and then progress to conventional loans as i grow my portfolio...how do i do that using an llc?
Hello Clint I like this video so I have an llc but how do I make it into a disregarded llc and is it a good idea to use it when buying my first property? Any help will be appreciated thanks
The tax election is made when you obtain your EIN for the LLC. To be a disregarded LLC you can only have one member. Disregarded will avoid having to file a tax return but you must balance that against the state where it is created. A disregarded LLC can only have one owner and some states do not protect the interest in a single member LLC I.e., no charging order protection.
@@ClintCoons perfect thank you yeah that I will be the only member on my llc and I’m from Virginia so this is very useful info thank you Clint I will try that.
Hey Clint, I haven't heard much about Delaware LLCs for RE investing, can these be set up as diregarded entities? or is the Wyoming one preferable for that process to work?
@@ClintCoons is it smart to give both holding companies the exact same name being they're in 2 different states? Like for example, Good Business Holdings LLC (in Wyoming) & Good Business Holdings LLC (in Delaware)
Clint, if I bought a property in Utah and put in into a corporation in Nevada, then I closed the corporation, took myself off as officers in Nevada and opened the corporation in Wyoming using the same name, do I still own the property? Or do I need to re do the deed paperwork with the new Wyoming corporation even though it carries the same name. I was told the property is in limbo now because the EIN numbers are not the same. Thanks
Yes this could create a problem if title was able to track the chain of events. In such an event the prudent course of action would be to reorganize the NV corporation into WY thus you would maintain the EIN and the entity status. If you shut it down and deeded the property out you might create a taxable event for yourself.
If my Wyoming LLC is set up as a disregarded entity will that effect my ability to secure Business line of credit. Knowing that lenders want to see 2 years of tax returns. Also how is it possible to have my WY entity be set as disregarded and along with being set up as partnership with K-1? You mentioned that’s how you do it for your holding company
My preference is to set up an entity in the state where you are conducing business if you are looking to build credit. Have you viewed my video on building building business credit?
Real Estate Asset Protection understood, so if credit is your motive the entity should be in the state you’re doing business in. But what if I want the credit and anonymity? How will that structure look like ?
What if I purchased the property already cash but want to refinance the property to buy another property How difficult will it be for me to get them to fund me under the LLC?
@@ClintCoons then should I put it in a land trust after I refinance? Or is there any other way I can try to refinance without taking it out of the LLC?
Thank you for the content Clint. How can one form a partnership WY Holding LLC if the person is a single member? Can I form a WY disregarded LLC and make it a member of my holding LLC?
You need to find another partner. This could be a parent, sibling, child, or business entity taxed as a corporation. Remember you only need to give the partner a .5% interest.
The commentator is not addressing a serious problem with our monetary system. The Bank "loan" is really a ruse. Simply stated: the banks are taking your signed promissory note and depositing it in a transaction account as if it was a check "an unconditional promise to pay is cash", then they draw a check from that transaction account and "loan" it back to the signer. In a foreclosure the bank gets a free house because they bank introduced no consideration in what I believe to be a unilateral contract because there was no "VALUE RECEIVED". The bank did not specify THE VALUE RECEIVED.
Claim Your FREE 45-minute consultation to receive business planning tips and asset protection. 👉 aba.link/a68783
Do issues occur when using this process with off shore accounts?
Thank you for this video. You have one of the most professional and informative channels on TH-cam.
🙏🏾Amen🙏🏾
I totally agree that LLCs are a smart strategy for real estate investing. I would suggest caution in terms of setting up a holding company LLC. We have one LLC that owns a mixed use commercial building and we can use that for our K-1 tax reporting. If we were to add a holding company, that would add complexity and cost to our annual tax returns. From what I understand, a holding company LLC adds another layer of legal protection but it does so at a cost
The holding LLC is typically used for annuity and/or to consolidate ownership of multiple LLCs. In your example if you have a commercial loan and the lender asks for copies of your annual tax return you must approach the holding LLC with caution so as not to throw off how the return looks when presented to your lender. Thanks for the great contribution.
@@ClintCoons I’d like to have you one of my educational webinars for financial advisors.
You just blew my mind this makes so much sense
I am impressed. Didn't learn this in class. Thank you for the free content.
Glad it was helpful!
Dear Clint, you are amazing and I am your big fan. I appreciate your honest and thorough videos, here is my honest advice I wish you would also add your child company or services to find great investment rental properties with tenant management services included, I can see if you add that you will have largest empire ever in this business ever made!
Here is our other company that does just that: infinityinvesting.com
May God bless his soul for this valuable information.
Many many thanks
I bless the day I signed up with Anderson Business Advisors! Sunny days ahead! Great video!
Thank you.
REAP what you sow. Absolutely loved the video thank you
Glad you enjoyed it
You are awesome, your account has taught me so much.
Happy to hear that!
These videos are gold!! Thank you
Glad you like them!
This was a great video about using LLCs correctly
Thank you so much for putting out such a great contents. Been a fan since I saw your first video 💯
I appreciate that!
After 4 years of investing full time I am told to “go back to work” by the lenders in order to get financing. This video really helps me learn how to structure my business to qualify for lending and take it to the next level. Thanks again!
Thanks for watching.
Fantastic content! Thank you! You deserve more subscribers...
Ii
O
Easy to understand and follow and straight to the point! Thanks.
Amazing content. Thank you.
Thanks
Thank I’m just started investing in real estate and will use this advice.
Thanks for the information. Your channel is super informative and straight to the point. Well done!
thanks
Excellent video!
Thank you very much for this information Clint very timely by the way as I am going through that same issue. 👍
This is a great video, thanks for sharing this knowledge
Glad you enjoyed it!
I LOVE YOUR VIDEOS!!!!
Thanks
This is great information!!! My only question: When you want to transfer funds from the K-1 rental income account, do you have to transfer it first to one of the LLC's that it owns, then transfer the funds to your personal account? Or can I just transfer it straight to my personal account two months in advance.
My second Question: If I do not have a second partner to create the K-1 account, what other alternatives do I have?
Marcus it must run through the LLCs and out to you. Thus, the holding LLC will collect funds from the real estate LLCs
So true! My experience, once the LLC is introduced in a conventional loan application, they need all the information on the LLC assets and taxes. Much better to avoid
Thanks for the Wealth of Information.👌🏽
You are welcome
Awsome stuff, can I get a business checking account with a disregard LLC?
BX STAND UP!!!
Yes you can.
Great content Clint. I only wish I had watched these videos before purchasing my first investment property in my own name. The property is located in Atlanta, Georgia and was purchased using a traditional loan. The original lender sold my loan to Stern Lending. Now that I have an LLC created, I have requested a transfer from my lender. Stern does not want to transfer the loan and has suggested this I refinance. I’ve also scheduled a consultation with a business attorney but do you have any advice to offer me?
If you move your property into an LLC it would be very unlikely if the lender is willing to assign the mortgage. My recommendation would be to move the property into the LLC and leave the lender out of the equation. Could the lender accelerate your loan if it is discovered? Yes but I rarely see lenders take this type of action unless the borrower has missed payments etc.. Another idea is a land trust for your property then transfer the land trust into the LLC.
Put in a land trust and then put the trust in LLC Clint has a vid on this also
Best comment ever. They want to know how much money you spent on wine last month
Thank you for this!
Great video thanks for sharing. good time about the K1!
Thanks for watching!
Hey Clint! I am recommending that my borrowers just do 3 months or more.
Excellent. Do you work with many investors?
I LOVE CLINT AND ANDERSON ADVISORS
I just purchased my first rental units and I'm not sure what type of llc to open I plan to buy another within 2 years I would love to talk to you furthermore and perhaps get one set up. Where may I be able to reach you??
You can set up a strategy session with this link: aba.link/30minSession
How can a general partnership be setup such that one partner (of two) retains their annual qualification for medicaid as the general partnership earns a profit on interest on private money loans throughout the year?
Love this. Very useful stuff.
Thanks Clint for the great info. If I am buying only one investment property with a group of investor friends and getting conventional loan under only my name, should I still need a holding company in addition to the LLC that I create in the state where I buy?
Only if you want anonymity but you must definitely put together a JV LLC to protect your interests
@@ClintCoons Thanks for your response!
Thanks for the input , I have an LLC for the pass 4 years and don’t know how to use it , yes I just refinance and it got a little frustrating for what they asked for , thanks for the 411
You are welcome.
I was following your advise and got confused at the end. If we have a partnership WY holding LLC, and individual in-state LLCs, if we want to expand, should we get the loan in the name of the holding?
The loan would need to be taken in the property holding LLC, most likely, unless you're looking for a portfolio loan that will cover several of the properties.
Imma use these for monopoly
Can you compare commercial property Delaware vs Wyoming LLC What differences?
They are pretty much the same but lenders on larger deals often prefer DE over other states. It really comes down to the state that has more entity case law and DE wins hands down.
Awesome tip. Thank you for the lesson.
Glad it was helpful!
How do I have you execute an operating agreement for my llc
If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Is the same thing applies during re-finacing?
Depends on the lender. It is advisable to ask your lender in advance of obtaining the financing wether you need to change anything for the loan.
My lender will not let me deed the property into an LLC without the risk of the Due on Sale clause. Should I deed it over anyway or use another form of liability protection? PLEASE HELP
This is a personal decision. Most of my clients do deed their property into a LLC for asset protection and if the lender later notifies them of a concern - they pull the property out.
Real Estate Asset Protection In another video I thought you said you would title the property in a trust, then assign the LLC as beneficiary of the trust? Or something like that? And that using a trust this way is legal and the lender can’t do anything about this, correct?
great video! thank you so much!
Glad it was helpful!
What about paying cash for real-estate under llc with no financing?
Buy it directly in the name of the LLC
im planning to invest in short term rental log homes , im looking at smoky montain area ... how do i lear n weather Tenn or NC is the better state llc/taxes and laws
I invest in NC and I can attest that the property taxes where I invest are very low. A solution would be to join reia's in each state and speak with other investors.
THANKS CLINT 💯
You are welcome.
Quick question with the WY HoldCo: if it's taxed as a partnership, there has to be more than one member, correct? Who/what would be the other member?
You would need to use another entity like a management company with a small interest.
@@ClintCoons Got it, thanks.
Wonderful tax insight. Keep up this great content.
Much appreciated!
Good stuff, explaining everything very thoroughly!
Are there books you can recommend for helping learn these instruments of protection for the layman who is starting on this
Funny you should ask: www.amazon.com/Asset-Protection-Real-Estate-Investors/dp/0979786045/ref=sr_1_2?keywords=asset+protection+real+estate+investors&qid=1574485533&sr=8-2
Clint, you always have great videos and seem very knowledgeable. I have a number of rental properties and it’s on my list to get more organized. How do I contact you for further services? Oh I just read the top of the video discription. I see you have it all listed there. I should be in touch
Thanks
Mike
Why should a private money lender, a pml, setup an LLC for collateralized lending ?
Asset protection would be the primary reason. If you are sued all of your notes would be at risk.
@@ClintCoons might the various insurances not cover lawsuits? E.g. car insurance, etc.
@@oleopathic Sure insurance is important in your overall plan. The LLC is added protection. For example, if you default on a loan your insurance will not cover you. There are many exclusions to policies that people are not aware of until a claim is filed.
@ClintCoons thank you.
Should I form a HOLDING COMPANY to flip property in multiple states? If I form a LLC in Wyoming, do I have to open a BANK ACCOUNT in Wyoming?
You can open your bank account anywhere for your WY LLC but the flipping side of the question - you can but it will depend on how involved you will be in the flip. Sometimes anonymity can work against you making it more difficult to run your active business. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Won't you get hit with taxes upon distribution from an LLC ?
Also, won't your tax bracket slide up a notch if you're a W-2 employee outside of lending?
Distributions have no relation to taxes unless your LLC is set up as a C-corporation. The only time you have income from an LLC is when the LLC has generated income. (Again this does not apply to C-corporations). Yes your income tax bracket will go up the more you make at your W-2 job.
can the same process work, if funds are in an trust account
Yes. The trust can hold the deed of trust on the property.
In a partnership owning llc structure, if the partner gets sued does it put all the properties held by the llc in jeopardy?
No but if the LLC is sued then yes all the property held by the one LLC is in jeopardy. Hence, place one property per LLC.
Do you need to have a business degree to invest in real estate??
Absolutely not.
@@ClintCoons Where do I begin?
@@2_572 Once you have the capital, like me I had no capital, but got a loan from Bank through the help of Mrs Doris, she is a staff , the interest rate was 3% and pay back time is 3years
@@timothydzenan6041 Capital? Meaning money?
@@2_572 capital means money to start up a business.
Quick question! Do you have to pay personal taxes on the 20k when you pull out of your LLC to sit for 2 months?
You do not pay tax on money you put into an LLC and later withdraw. you only pay tax on income generated in the LLC.
Thanks for the question. Just gave me an idea for another video. If you would like a free copy of my book "Asset Protection for Real Estate Investors" email my assistant Deborah Lewis - dlewis@andersonadvisors.com.
@@ClintCoons did this video ever get made?
@@francismialkowski4190 It will hit next Tuesday
That is easy peasy!
I will bother with it when I have to. Until then it is not going to tick my head
I tried to get a loan in my name but they said I would have to get an investment loan since I was not intending to live there. I did not want to lie in the application where they asked about intended use.
That is correct. If you are not living in the house then you need to get an investment loan - unless it will be a second residence.
If you go with the holding company / partnership scenario, do you still hold the investment funds in the holding company, and then transfer them down to personal when required 2 months in advance or does that change?
yes, you need to season the funds in your personal account.
Great information, thank you. In the first scenario with the 20k, after seasoning in my personal account is the loan made to me personally or will the loan and deed be in the name of the LLC and I am just making the down payment for the LLC?
Typically it is to you then you transfer the property into the LLC
When you say set up as a Partnership do you mean do a Limited Liability Partnership instead of the LLCompany?
I am referring to the tax status
Thanks do you have a video or info if I’m putting down the 20K and using a hard money lenders money to purchase the property - how to set up the LLC - is it the same process?
Same process.
Do you recommend creating LLC for purchasing your first property?
Yes. Here is link to a video on the topic: th-cam.com/video/P7BSvC3JZ9I/w-d-xo.html
Good stuff as always Clint. What if its a 1031 exchange from residential to commercial?
Without knowing more, it should not make a difference..
In the current market, you may not have 2 months to season the money before making the offer, what then?
It can be done without seasoning I am just giving you the best course of action.
Isn't just putting money in another entity account, albeit a WY LLC, not technically protected because they ask you about your assets when being sued? And the idea of what's hidden can be found therefore not really protected? And taking a distribution could create a tax? And putting funds in and out of personal entities / accounts considered co-mingling which allows the corp veil to be pierced?
You do not have to disclose your assets until you a judgement is entered against you.
@@ClintCoons Thanks. What about putting funds in and out of personal entities / accounts considered co-mingling which allows the corp veil to be pierced?
It does not provided you properly document as contributions and distributions.
When you move $20k from your holding LLC to your personal bank account, doesn’t that become taxable as income?
It does not because a distribution is not income.
@@ClintCoons
Thank you for your reply.
Does this hold true no matter what the purpose is for the money?
If you set it up as an scorp would all the holding be s corp or can you choose a different entity for each holding company
Could you give me an example? If you have an S-corp as your holding company for your various LLCs then all the income will flow through the S-Corp.
Great video
Glad you enjoyed it
How you doing man? How can I use Llc money to purchase a new dump truck for my dump truck business? To get the ball rolling
Yes you can.
How/where is the $160K in the WY LLC held in this scenario? Do you have to create a business accounting in WY because the LLC is in WY? Also you mentioned privacy through the WY partnership. What are your thoughts on using a company as the registered agent for the local state LLC removing the owners name from public records? Is that a coo work around to avoid the partnership WY LLC?
The cash is held in the LLC's bank account. You do not need to open a bank account in WY you can open it locally for your WY LLC. Yes when we file the LLC we serve as the resident agent for the WY LLC to keep our client's information private.
What if you want to name the LLC after the address of the rental property which is usually a standard? Example 123 Birdview St, LLC.
In this case you are not going to create a LLC on a property you might not be able to close on plus the two months of income will not be possible. Please advise.
Correct or you accept the fact the address will not match the property. Maybe wait until your money has gone hard then set up the LLC before closing.
@@ClintCoons Help me to understand. I transfer the 20-25% downpayment to my personal account and let it sit there for 60 days. I put in an offer for 123 Birdview St which the buyer accepts and then I tell my bank I would like to put it in an LLC? Granted, I don't have the LLC created since I want it to match the street address. The fastest an LLC can be created is in 2-5 business days according to LegalZoom. I can stall the closing processes until 123 Birdview St, LLC. is created?
Correct but an LLC can be set up in WY in a matter of minutes.
Could my living trust own the LLC?
Yes and it should to avoid probate of your LLC upon your passing.
Would this not be considered co-mingling assets, and pierce the corporate veil?
No. Co-mingling occurs when you use business assets to pay for personal expenses and you do not have a system in place to track reimbursements etc. Have good books is very important when it comes to a claim of co-mingling assets.
I bought my rent houses through my LLC and I’m a sole proprietor. I’m not sure how you got “traditional” loans by “seasoning” personal accounts because my mortgages and insurance won’t allow rentals through that avenue unless I lived in property for over a year first. What did I miss?
I am discussing seasoning money for a new purchase where you are purchasing in your own name i.e. ,a freddie or fannie conforming loan would require you take title in your own name and have seasoned funds for the down.
Is the K-1/holding LLC the same as the disregarded LLC at the top? Or do you have two separate Wyoming LLC’s?
It is a separate WY LLC. The WY LLC is the holding LLC.
Real Estate Asset Protection ok so in total, I’d need 2 WY LLCs correct?
Would you do it the same if using an S-Corp?
Yes
Great video!
Hey Clint my question is if I create a holding LLC let's say out of Wyoming and I plan to use traditional financing should I create another LLC from the state in which I plan on buying the properties under the holding LLC to finance my properties?
Yes but are you planning to finance the property in the LLC or your own name then transfer to the LLC.?
good question, I’m planning on financing the property through the LLC from the state in which I plan on buying. Is this practical ? Will I achieve anonymity this way ?
@@vvsblk4594 Yes you can finance if you find the right lender. Most brokers will only finance residential in your name then you will deed the property into the LLC
@@ClintCoons if I buy the property in my own name and then deed into the LLC is this voiding anonymity ? And are there other ways to finance real estate using business credit where i personally remain anonymous?
@@vvsblk4594 Deeding it to your LLC does not void your anonymity but you are in the chain of title. If you use a quitclaim deed then this is a concern that will look suspicious so always use a warranty deed.
Is it possible to use VA home loan, to purchase multi family residence, under an LLC?
Yes you can purchase a multifamily provided you live in one of the units and it is not more than 4 units in total. Yes you can transfer the property to an LLC but it does violate the Guaranteed Loan and Assumption Policy Rider you signed when taking out the loan I.e., due on sale clause. Does this imply your loan will be accelerated - probably not but its always a possibility. This is type of clause is standard in most residential mortgages and is rarely enforced. If concurred, I like to use land trusts to hold title.
I am about to purchase my first home using fha financing and then progress to conventional loans as i grow my portfolio...how do i do that using an llc?
After you acquire the home you will typically transfer it into an LLC. The lender will most likely not allow you taking title in the LLC.
Hello Clint I like this video so I have an llc but how do I make it into a disregarded llc and is it a good idea to use it when buying my first property? Any help will be appreciated thanks
The tax election is made when you obtain your EIN for the LLC. To be a disregarded LLC you can only have one member. Disregarded will avoid having to file a tax return but you must balance that against the state where it is created. A disregarded LLC can only have one owner and some states do not protect the interest in a single member LLC I.e., no charging order protection.
@@ClintCoons perfect thank you yeah that I will be the only member on my llc and I’m from Virginia so this is very useful info thank you Clint I will try that.
Are you taxed on the distribution to your personal account?
No.
Hey Clint,
I haven't heard much about Delaware LLCs for RE investing, can these be set up as diregarded entities? or is the Wyoming one preferable for that process to work?
I talk about DE LLCs. It depends on your strategy. Typically I use DE for commercial deals.
Hey Clint, would you have your WY holding own your DE holding? Or would you just treat the DE as a separate secondary holding partnership?
@@GM1024 Keep them separate
@@ClintCoons is it smart to give both holding companies the exact same name being they're in 2 different states? Like for example, Good Business Holdings LLC (in Wyoming) & Good Business Holdings LLC (in Delaware)
@@lilharv7376 Never. It makes it impossible to open bank accounts with the same bank.
Clint, if I bought a property in Utah and put in into a corporation in Nevada, then I closed the corporation, took myself off as officers in Nevada and opened the corporation in Wyoming using the same name, do I still own the property? Or do I need to re do the deed paperwork with the new Wyoming corporation even though it carries the same name. I was told the property is in limbo now because the EIN numbers are not the same.
Thanks
Yes this could create a problem if title was able to track the chain of events. In such an event the prudent course of action would be to reorganize the NV corporation into WY thus you would maintain the EIN and the entity status. If you shut it down and deeded the property out you might create a taxable event for yourself.
If my Wyoming LLC is set up as a disregarded entity will that effect my ability to secure Business line of credit. Knowing that lenders want to see 2 years of tax returns. Also how is it possible to have my WY entity be set as disregarded and along with being set up as partnership with K-1? You mentioned that’s how you do it for your holding company
My preference is to set up an entity in the state where you are conducing business if you are looking to build credit. Have you viewed my video on building building business credit?
Real Estate Asset Protection understood, so if credit is your motive the entity should be in the state you’re doing business in. But what if I want the credit and anonymity? How will that structure look like ?
@@90422__ It wont unfortunately
What if I purchased the property already cash but want to refinance the property to buy another property How difficult will it be for me to get them to fund me under the LLC?
You will most likely need to remove the property from the LLC for the Refi
@@ClintCoons then should I put it in a land trust after I refinance? Or is there any other way I can try to refinance without taking it out of the LLC?
@@primproper1955 I would start by asking your lender if they will allow the refi in an LLC. Best to attempt with a community lender.
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Thank you for the content Clint. How can one form a partnership WY Holding LLC if the person is a single member? Can I form a WY disregarded LLC and make it a member of my holding LLC?
You need to find another partner. This could be a parent, sibling, child, or business entity taxed as a corporation. Remember you only need to give the partner a .5% interest.
@@ClintCoons thank you!
The commentator is not addressing a serious problem with our monetary system. The Bank "loan" is really a ruse. Simply stated: the banks are taking your signed promissory note and depositing it in a transaction account as if it was a check "an unconditional promise to pay is cash", then they draw a check from that transaction account and "loan" it back to the signer. In a foreclosure the bank gets a free house because they bank introduced no consideration in what I believe to be a unilateral contract because there was no "VALUE RECEIVED". The bank did not specify THE VALUE RECEIVED.
Any way to make the holding company a partnership if you're the only member?
Yes. Make a corporation or other entity the additional member.
Legend!
Does a holding company still qualify for the 20% pass through tax law for single member llc’s?
Yes
But what if your first starting, would you do the same thing or ?
This depends on what you are doing. If you would like a FREE 30-minute consultation, you can request one here
- aba.link/30minSession
Simply amazing!!!!
Thank you! Cheers!
How can you open a bank account with a disregard LLC without a EIN?
You would use your SS#. Some banks will not allow it.