LLCs in Texas

Can anyone share with me about setting up an LLC in Texas. I’m new to real estate investing and would like an overview of setting up an LLC for a real estate investing business.

Thanks!

There are many companies online that will do it for you. $300 state fee, plus the company’s filing fees ($80+). If you want a very well written articles of incorp, then you need a CPA or a lawyer to do them, then you’re looking $1000+

you can do it online on the state of texas website. Make sure you email them first to do a preliminary name check to make sure its available.

You don’t need an LLC unless your net worth is at least $5M. Insurance will be sufficient until you reach that point. When/if you decide to organize, make sure you have a proper operating agreement drafted as your LLC is practically useless without one. Unless you have experience you didn’t share with us, don’t set it up yourself. LLCs have failed simply because a member checked the wrong box on a form and the DIY kits expose you to unnecessary liability.

Do some more research on TX LLCs and make sure you will still make money while paying the franchise tax.

I do not agree at all with the idea that you need $5M of net worth before an LLC makes sense for asset protection purposes. That opinion is the opposite extreme of “Use one Nevada LLC for every property, each held by a Land Trust and managed by a Jupiter C-Corporation”. By all means, weigh all of the costs, including time, hassle, taxes, etc. Insurance is a must, an LLC is not a substitute for insurance, nor is insurance a substitute for an LLC. Each plays a different role in protecting assets. LLC’s are easy to create (if you know what you are doing). Running them correctly is where many REI fall down - it takes a certain amount of dilligence and effort. I do see a lot of “would be” investors spend serious dollars on overhead (such as LLC’s) and then never do anything with the business. As such, you might want to complete one deal before spending on an LLC, unless you are quite certain that you will stick with the RE business.