Posted by Yasir Omari on July 17, 2003 at 21:53:27:
My suggestion that if you are planning on pursuing this as business then create you a couple of corporations. S corps to hold your properties, in which, the LLC would qualify I believe. And, a C corp to flip properties. Double check this advice with your accountant. Good Luck!
Where should I form the LLC? - Posted by Will
Posted by Will on July 07, 2003 at 17:16:42:
I am couple of weeks away from closing my first commercial deal, and per many people’s suggestions I am planning to form a LLC to hold this property. If you’d answer couple of questions I have about this topic, I’d be much obliged.
First question I have is in regards to taking title with LLC from the start. My loan broker is advising me to take the title as an individual(to make things simpler for the lender) when we close, and then have the escrow company to do a change in title by me quitclaiming the property into the LLC shortly after we close. Would you recommend doing it this way, or taking the title under LLC from the start? As a side note, I am doing a 1031 and my relinquished properties have my individual name on the title. Also, I am a guarantor for the loan.
Second question is in which state I should form this LLC. The property is in Okalahoma, and I live in California. For best asset/liability protection purpose, would it be advisable to form it in the state where the property is located, or in Nevada(as some suggests is the best to place), or in my home state?
I really appreciate your response in advance.
Best regards,
Will
Re: Where should I form the LLC? - Posted by ray@lcorn
Posted by ray@lcorn on July 15, 2003 at 13:54:50:
Will,
Hope this answer isn’t too late to help…
First, on the issue of titling… if you’re in a 1031 you’ll have to take title in the same name you sold the relinquished property with unless the LLC is a single-member LLC and you are the only member. Be sure you clear the LLC structure with the intermediary.
As to the state of domicile for the entity, my preference is to use the state where the property is located… in your case Oklahoma, unless there is some quirk in the tax law (like TX) that makes it more expensive to do business that way. I prefer that because in the event the LLC has to go to court (for evictions, suits, etc.), it is generally easier to be a domestic entity. I’m not sure there would be any difference in libility/asset protection regarding the state of domicile. Check with your attorney.
ray