Good evening - I have a quick question. Do you use a PO Box in your rental business?
We are planning to open an LLC for our rental business. We don’t want to disclose our address. We understand we can’t file the Articles using a PO Box as our address. However we thought about opening a PO Box at our local UPS store - they offer PO Box with real street and number addresses. So instead of having to use a PO Box, we can write a real street name and number. No one would know it is a PO Box.
We thought about opening the PO Box and filling the paperwork with the State using their address. Am I missing anything here?
That is exactly what I do. Use the PO Box number to receive your mail and the corresponding street address at the UPS store and NEVER give your home address to the tenants or anyone else connected with your business. I would also strongly urge using a cell phone for your business and never giving your home phone number to tenants.
Ditto on that. You need to keep business and home separate. I would also add that you may want to get an unlisted number for your home because tenants will use that to locate your house as well.
When you register your LLC with the state, you need to give the state a physical address where you can be served process. While a private mail box is good for your LLC’s correspondence address, it is not sufficient for this purpose.
Another consideration is the location where business records are stored. Some states require this information as part of the filings and that is your home unless you have an office.
i have NV LLCs and need to use a resident agent there which recieves all my mail and forwards it to me. They are the only one with my actually address. The cost is $100 per year.
Dave - the UPS store gives you a physical address for the PO Box. So no one will know the address I am providing is of a PO Box. It will look like 123 W Park St, Unit #1234, Phoenix, AZ, 85015. Can I still use this as my LLC’s address. If someone showed up there to serve me, he would see it is a UPS store. Would this be a problem?
BLL - I don’t think my state requires me to provide the physical address where the records are located. I just checked the Secretary of State website. It asks for the "known place of business in Arizona - if the address is the same as the street address of the statutory agent, than write “same as statutory agent”. My understanding is that I can use the street address of my PO Box.
Mike - cell phone… we will use my wife’s cell phone.
Raj - we will unlist our number. Thank you.
Yrush - Thank you for the information. We thought about using an agent here to protect our privacy but then figured that we were becoming a little bit paranoid… :O) Thank you for sharing the price you pay. If we ever need to use one, we will have it as a reference.
j1dias,
You will have to put a “registered agent” on your Articles of Incorporation paperwork with the state you are registering to do business in. This needs to be a REAL PERSON at a PHYSICAL ADDRESS. The purpose of this agent is to have an actual person who can receive legal documents for your business. Therefore the idea of listing the street address of the UPS store will not work.
In my case, we use my dad as our registered agent. We also have my parents’ physical address on file with the state as the location of doing business. We use a PO Box to have our rent checks mailed to us and for all correspondence back and forth. If you do not know anyone in the state you’re intending to do business, you can pay the state or another entity to act as your registered agent. Of course there are fees associated with this…sometimes high fees.
We use our cell phones for our business. It means we can always be available if we want to be (or we can shut them off). Through a few steps, you can make it difficult for your tenants to find out where you live…that’s a good thing. As is always stated here, have plenty of insurance and you should be fine.
The business address is where you actually conduct business. PO Box or registered agent addresses don’t count unless that is the actual location where you store business records and/or conduct business. If a process server goes to the UPS store and the clerk doesn’t accept service, the LLC will be deemed invalid and ignored for limited liability purposes.
NV LLCs are only for business that takes place in NV. A NV LLC must register in the state where it actually conducts business and is subject to the rules of that state, including the disclosure requirements. There is no benefit to foreign organization unless you conduct business in multiple states.
In my state, you must provide an address where you can be physically served. So some folks have an arrangement with their lawyer, where the lawyer’s office is used as the address for the business.
I don’t know corporate policy, but I have a personal relationship with the franchisee of my local UPS store and he is more than happy to act as my registered agent.
I do not conduct business in NV and in fact some of my NV LLCs are not even registered on the Fl website but still operate and pay taxes. Florida has no state tax so I think i am not required to file it or the state just does not care to much since 2 of my LLC are over 5 yrs old and never registered but little activity in them
If they aren’t registered in FL, then it’s the same thing as if they don’t exist. They can’t sue and any lawsuit against them will turn into a lawsuit against you personally.
All - thank you so much for all the advice and insight. Over the past few days I was really trying to figure out the best approach for us. I want the privacy so I don’t want to use my home address. And I don’t want to have to pay for someone to be the registered agent only so he/she can receive documents in my name. I went back and forth on this one and I was almost sold in using my home address and forget the privacy…
Then out of the blue my wife remembered that I am activating my real estate license on July 1st. This means I will have an office - basically my broker’s office… :O) I can use that address and keep my privacy… :O)
I am so happy that this is finally solved… :O)
One last question - would the correspondence from the State or from the court come in the name of my company or in my name? If in the name of the company, I would probably need to give my broker the heads up…
Thank you again for all your help. Have a nice evening!
I don’t hide from my tenants and haven’t for ten years. I have never had an issue and I sometimes instruct them to bring the money directly to me with penalty if they are late. I suppose it could haunt me someday but I typically try to stay friendly with tenants and maintain a good relationship. I have only had three evictions in 10 years so I guess using my home address for my LLC hasn’t hurt me.
j1dias,
If you are conducting business in your business name, then official documents will come addressed to your business name. So you need to inform not only your broker, but also the post office of that. You need to make sure your broker is cool with the idea of you doing things on the side and having his business office address associated with it.
Brockovich - thank you for your insight. I don’t think the idea is to hide from my tenants. For one, I am planning to manage the properties myself (actually, my wife will do the property management and I will do some - not all - of the maintenance). So we will not hide from them. But I do want some level of privacy.
And based on my limited understanding 3 evictions in 10 years is very good. Congratulations! You must be doing things right. However I am not sure if I will be able to do the same. For one, I am planning to start with low income rentals and then move to mid to high-income. And I believe that number of evictions increases as you have more low-income rentals… What are your thoughts on that?
And one last thought - low number of evictions may be a result of very low rent. Would you agree with this? Please, understand that I am not saying you have low rents. By sharing my thoughts and soliciting feedback/insight I learn and become a better investor… :O)
Justin - Thank you for the comment. From my broker’s perspective this is not “on the side”. This is my main activity in real estate. He knows that the only reason I got my license was because I wanted to do it for myself. And the only reason I signed up with him was because he is also an investor and he said that he could help me start my business. I am still going to share this idea with him to get his perspective.
My rentals rent beteen $450-$575 per unit. I am in Ohio. I concentrate on 3 and 4 unit buildings mostly. I would agree that to a degree low rents could result in less evictions. I am typically at or just below market but offer more amenities. My tenants know they get a lot of value for the money, especially after they are there a few months and experience problems. This keep them happy and keeps them paying.It is not uncommon for them to tell me I am the best landlord they have ever had because I handle repairs immediately and take good care of the yards. I have some tenants who have been with me since 2000-2001. My vacancy rate is less than 3% on an annual basis so yes I would rather keep my rents competitive, with low evictions and low vacancy rates as I realize the gains by keeping my rentals fully rented to capacity. They have my cell phone number and I have their work number, cell phone number etc… This keeps the relationship open and more cordial and if there is a problem(repairs, late rent) etc… we can get in touch woth each other to resolve the issue. Lastly, my tenants pay all utilities and I allow pets(with extra fees of course) they give me a competitive edge also becasue many ppeople own pets. Some on here will swear not to take pets but again I have only had 1 real problem in ten years with excessive damage caused by a pet. Since I average more than $250 of extra income per for pet fees this easily offsets those rare instances when I have a problem. Hope this helps.
The address where legal service may be delivered. This must be an address where someone can accept legal service. It doesn’t have to be where you conduct business or store records. You can use your attorney’s address or a friend or family member’s. The only requirement is that a person of legal age can sign. This address must be disclosed in filings with the state and I prefer to use an attorney’s office since the first thing you do when you get served is call him. If he accepts service, he has time to review it and can tell you immediately if the claim is valid. Otherwise, you wait for him to call you back after you send him the paperwork and worry.
The second address is the mailing address. This can be a PO Box, UPS store, or any other address the USPS accepts. It doesn’t need to be the place where you actually conduct business. However, this address must be disclosed in filings with the state since that is where documents will be sent. I think a UPS store or private mailbox company is the best option.
The third address is where you store business records. This must be a real address where records are stored, not a PO Box. Some states, not all, require this address to be disclosed in filings. It does not have to be the address where you actually conduct business unless you store records in the same place.
The last address is your place of business. This is the location where you actually conduct business. It is not a PO box, etc. and it may or may not be the address where you keep business records as some people keep their records with an accountant or bookkeeper. Depending on your state, you may or may not be required to disclose it.
Government documents will come in the name of the company. Legal service will probably name the company first and anyone else involved in the transactions. Attorneys tend to sue everyone even if they have a minimal involvement. Expect to get sued personally every time your business gets sued. That doesn’t mean you will lose or are responsible, but it does mean you have to pay to defend yourself.