LLC by use
An LLC for Real Estate Investing
Investors form LLCs for the same reason landlords do, with one more layer: deals. A flip has a closing, contractors and a resale; a buy-and-hold has tenants and a lender; a partnership has money from more than one person. Each of those is easier to document, finance and unwind when a company is the party to it.
What investors decide more deliberately than most owners is structure: a company per property, a company per deal, a holding company above operating companies, or one entity for everything. The state filing is the same for each company. The structure is the plan for how many filings there are and which one owns what.
Form the LLC, filed for you
Pick the state, answer a few questions, and we prepare and submit the filing. Every cost is shown before you pay.
Start My LLCWhy an LLC for This
A company is the buyer, the borrower and the seller
Purchase contracts, loan documents and the deed can all be in the LLC's name, so the deal is the company's deal. Partners own membership in the company rather than fractional interests in a building.
Claims stay with the property they came from
A claim at one property, held in its own LLC, is a claim against that company. Investors with several properties commonly give each its own company, or use a series LLC in the states that allow it, so one lawsuit does not reach the rest of the portfolio.
Partners get a written deal
The operating agreement is where capital contributions, profit splits, who signs for the company and what happens when someone wants out are written down. Partnerships that skip it tend to regret it at the first disagreement.
What the Application Asks You to Decide
- Which state
- For a company that will hold a property, the property's state. For a holding company that only owns the other LLCs, investors sometimes pick Wyoming or Delaware; the operating companies underneath still form or register where the real estate is.
- How many companies
- One per property is the conservative approach, with a filing fee and annual report for each. A single company for a few lower-value properties is cheaper to run. A series LLC (available in Texas, Delaware, Illinois, Nevada and some others) puts separate series under one filing, though lenders and title companies vary in how they treat it.
- Management
- Investment partnerships are usually manager-managed: the partner who runs the deals is the manager, and the application names them. Passive investors stay members.
- Registered agent
- One per company, in the company's state. Investors with companies in several states typically use a registered agent service in each.
After the State Approves It
- Sign the operating agreement before the first dollar goes in; it is the document that makes the partnership terms enforceable.
- Open the bank account and fund it with the partners' contributions in the amounts the agreement states.
- Buy in the company's name, or transfer the property by deed, with your lender's position on the transfer understood first.
- Track each company's annual report separately. Several companies mean several deadlines.
General information about how LLCs are commonly used, not legal, tax or investment advice. Whether an LLC, and which structure, fits your situation is a question for an attorney or accountant who knows your facts.
File in the States Owners Pick Most
- TexasFile in Texas
- FloridaFile in Florida
- GeorgiaFile in Georgia
- OhioFile in Ohio
- TennesseeFile in Tennessee
- WyomingFile in Wyoming
Every state and DC is available in the application. Each state page shows that state's fee, filing portal and typical processing.
Questions
Can an LLC get a mortgage?+
Yes, through commercial or investor loan programs; conventional residential loans are generally made to individuals. Lenders usually ask the members to guarantee the loan personally. Investors often buy in their own name with a residential loan and transfer afterwards with the lender's consent, or borrow commercially in the company's name from the start.
Should the holding company and the property LLC be in the same state?+
Not necessarily. The property LLC is formed or registered where the property is. A holding company that only owns membership interests can be elsewhere. Whether the second company is worth its own fees is a question for your accountant.
What is a series LLC?+
A single LLC whose operating agreement creates separate series, each with its own assets and liabilities, in the states whose statutes allow it. It can hold several properties under one state filing. Not every state recognises another state's series, and some lenders will not lend to one, so it is worth checking before you rely on the separation.
What does the application ask for?+
Company name, state, mailing address, members or managers, and the registered agent. Deal details, properties and partner percentages are not part of the state filing; they go in the operating agreement.
How fast is the filing submitted?+
On a standard order your filing goes to the state within 3 business days. Choose same-day submission and an order placed before 2 PM Eastern on a business day goes in that day. The state's own review time comes after that and varies by state.
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