I studied real estate for several years before coming back to MI to invest. Many of the materials I read are now 10 years old. I finally own a few houses & know it’s time to set up an LLC. However, finding someone who’s competent hasn’t been easy. Before I start asking around at the RE association abt who they use (many of them don’t have LLCs set up at all and do things very…unprofessionally).
My main question is, however, is whether or not I should use a Nevada LLC. My materials lead me to believe that’s the best way; but is it STILL the best way in 2013? (You see, in my materials MI tax liens paid 50%. Now 10 years later they don’t exist.) There are firms in NV offering they’re services by Net/phone.
I’ve seen Nevada and Delaware LLCs talked up a lot. Our LLC was formed in Illinois and we had to register it as a foreign entity in order to use it in Mississippi when we started doing business there. Sometimes the fees can be a lot more for the foreign entity so I’d check that out when considering to use an LLC from Michigan vs Nevada.
Establishing the LLC is very simple. You fill out the Articles of Organization and pay the fee to file it. That’s a simple form to fill out. What you need help with is writing a good operating agreement. Get a lawyer to do that for you. My RE lawyer in MS said he could set up an LLC for me for $400 if I needed another one. Also make sure you get the EIN number for the LLC. That’s like the LLCs Social Security number so you use that to set up a bank acct for the LLC. There are companies online which will establish the LLC for you, but they’re really just charging you to fill out the Articles of Organization and establishing a Registered Agent for the LLC. The LLC has to have a Registered Agent which is a person living in that state who can receive mail for the LLC.
If you are investing in one state primarily get a LLC in that state!
Registering as a foreign corporate entity in multiple states is fine, except it widens the liability risk of everything owned by that entity and does not create a firewall between state borders.
A Nevada, Delaware and Wyoming corporate entity is part of advanced sophisticated ways of liability protection.
Make sure you create a multiple member LLC. (Do not create a single member LLC as you have limited protections.)
Like Justin said get a good attorney to write your operating agreement!