I need to form an LLC and my lawyer said it would cost $1500 for him to do it plus what the state charges to file $300.

This seems alittle excessive but he does a good job

Legal zoom has an expedited package to do an LLC rush delivery for $360. I know... I know..... there will be some that hates legal zoom. But if it is straightforward and not complicated, then why now.

I just need it to put some rentals I have under.

Thoughts on the $1500 price tag? what can go wrong with legal zoom forming an LLC?

In a lot of cases, putting your rentals into an LLC is a waste of time and money.

It could be beneficial for you, but I would make sure before going ahead with it.

Do it yourself, less than $400, pretty easy to set up

$1500 is insane IMHO

Diggity,

I have 7, with 6 being duplexes. So 13 families.

I was always under the impression that I should do an LLC after 3-4 rentals.

I did go on rocketlawyer and its like 300 to do one plus the 300 reg fee...

IMO, if you hire a lawyer to form an LLC, the lawyer will be obligated to take care of any legal issues pertaining to the LLC. If you use Legal Zoom, you're on your own.

Nothing unique. 7 properties, all under my name, all financed and used as rentals. No one else (other than wife) is involved.

some people love LLC's for rentals but I have always heard an umbrella will do in most cases.

Not sure if that holds up once you hit a certain level so a CPA versed in real estate would know more.

I know some that put each property in a different LLC. Seems like a big hassle.

Series LLC.

Oh and your bank probably wont allow a change of ownership.

OP, are you in Texas? I've set up two LLC's through The Secretary of State's website. I don't recall the exact cost but somewhere in the $300-400 range. Mine are single member LLC's so they're pretty basic. Very easy to set up though.

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OP, are you in Texas? I've set up two LLC's through The Secretary of State's website. I don't recall the exact cost but somewhere in the $300-400 range. Mine are single member LLC's so they're pretty basic. Very easy to set up though

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You can't take Priv messages, do you have an email I can ask you a few questions about this?

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some people love LLC's for rentals but I have always heard an umbrella will do in most cases.

Not sure if that holds up once you hit a certain level so a CPA versed in real estate would know more.

I know some that put each property in a different LLC. Seems like a big hassle.

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At some point i would look at rolling them into an entity (maybe a series llc) but that would be more for a tax planning perspective than for legal aspects. I'm a CPA not a lawyer so a lawyer can chime in on the legal issues.

Do not use Legal Zoom or Rocket Lawyer, however do not pay $1500 to that attorney.

The power from an LLC does not come from the LLC itself, it comes from the operating agreement within the LLC, the bookkeeping, and separate bank account, and treating it like a separate business. Do not run anything personal through the LLC.

If you are in Texas, you should be able to get that all done from a reputable attorney right around $1,000.

Be careful transferring ownership of a property with financing. I do it all the time, but be cautious that the lender would have the option (but not obligation) to accelerate the note and call it due.

Last note, if you do set up an LLC, it is beneficial to have a partnership. Not necessarily for asset protection, but for audit protection. Give 1% to your wife or to a different LLC or Corporation. Your chance of being audited as a partnership is far less than it is with a single member LLC.

Series LLC's are good in theory but there is no case law to support them. For example, do you need to have a separate bank account for each series to keep the series liabilities separate? It has not had to hold up in a court of law yet to my knowledge.

Jeff at 12 realty dot com

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Series LLC's are good in theory but there is no case law to support them. For example, do you need to have a separate bank account for each series to keep the series liabilities separate? It has not had to hold up in a court of law yet to my knowledge.

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Absolutely. Should be interesting to see how that shakes out legally speaking. From a tax perspective it's not a huge deal.