One of the simplest business structures for your real estate investing activities is the LLC, or Limited Liability Company. Real estate investors have discovered that this is one of the simplest, most cost-effective ways of limiting risk and personal financial liability.
An LLC gives you the flexibility and ease of operation of being an individual, but still grants you many of the legal protections of a corporation. As a result, many real estate investors choose to take title to property in the name of an LLC.
Setting up an LLC is a relatively pain-free operation. I’ve provided handy links to each of the Secretary of State offices so that you can visit their website for more details about establishing an LLC of your own. I’ve also provided some links for sites where you can get the forms you need for your state and print them out.
The process is simple. Most states now permit online applications, but if you’re more comfortable you also have the option of printing out the forms, filling them out, and mailing them to the appropriate office.
While some real estate investors choose to seek professional assistance in filing the required paperwork, the process is simple enough that even a beginning investor can easily complete it. It’s really up to you and what you’re more comfortable with.
Each state has slightly different requirements, but they are basically the same regardless of where you live. Some of the questions on the form include the name and tax identification number for the LLC, as well as the legal address, etc.
You simply fill the form out, include the appropriate filing fee (usually about $350) and mail it to the Secretary of State in the state in which you are making application. The filing process is simple, and in most cases fairly straightforward. It makes perfect sense to protect yourself – and your assets – by taking these simple steps.
Every state has a variety of resources available for real estate investors on their website. I’ll list many of the websites below.
The Operating Agreement basically shows the role of each of the members of the LLC. You need this even if you’re the only member of the LLC.
You can get these forms here: Articles of Organization and LLC Operating Agreement. The site does charge for these forms. Last time I checked, they were about $20 each. You just select your state, buy the form, then download and print it.
Or, if you prefer to just have someone do everything for you, here is a company that can do it all online for you: CorpNet® Incorporation Services
Here is a list of the websites of the Secretaries of State for most states:
State Listings – Secretaries of State*
For LLC Application and Filing Information
New Hampshire http://www.sos.nh.gov/index.html
New Jersey http://www.state.nj.us/state/
New Mexico http://www.sos.state.nm.us/
New York http://www.dos.state.ny.us/
North Carolina http://www.secstate.state.nc.us/
North Dakota http://www.nd.gov/sos/
South Carolina http://www.scsos.com/
South Dakota http://www.sdsos.gov/
Washington, DC http://os.dc.gov/os/site/default.asp
West Virginia http://www.wvsos.com/
· Please Note – Some states do not have a Secretary of State. In these cases, duties of the Secretary of State are carried out by the Lt. Governor. This includes application and/or filing of LLCs. If you find a better link for any of the states, please let us know. Thanks!
Disclaimer: I am not a lawyer and not qualified to offer legal or financial advice. The decisions you make about your business are completely up to you and I’m not trying to persuade you to take any specific course of action. I’m just trying to provide helpful information and links to resources you may find helpful. I’m in no way responsible for the course of action you choose. Laws change and it’s wise to seek up-to-date legal advice from a qualified legal professional before taking a particular course.