Dallas-Fort Worth Real Estate Investor Club

Series LLC?

  • 17 May 2012 3:42 PM
    Quote
    Message # 923568
    Deleted user

    Anyone here start using series LLC or are traditional LLCs (one per property) still the prefered method to deed transfer over rental properties?
  • 17 May 2012 7:38 PM
    Quote
    Reply # 923695 on 923568
    Deleted user

    What I prefer is to use a Trust for each property.  The beneficiary of the trust can be of your choice and stays away from public records.
  • 17 May 2012 8:56 PM
    Quote
    Reply # 923844 on 923568
    Deleted user
    We use a Series LLC.  Bryan Dunklin set it up for us.  His number is 318-269-3348.  
  • 18 May 2012 12:09 AM
    Quote
    Reply # 923984 on 923568
    Deleted user
    While many lawyers are promoting Series LLCs, I would be very wary. It's a very new statute, and unless you are careful, there are plenty of ways you can screw this up. I typically set up Series LLCs when the investor is seasoned and has multiple properties that they want to put in a holding company, that is then managed by another LLC. 

    Also, a trust can keep the beneficiary out of the public record, but beware of a trust where you are the settlor and the beneficiary....this is almost worthless in protecting against a creditor.

    Feel free to call me to discuss these issues. 

    Abid Hussain
    Attorney
    The Hussain Law Firm
    888-789-7250
    abid@hussainlaw.com
  • 18 May 2012 1:38 AM
    Quote
    Reply # 924043 on 923568
    Robin Carriger (Administrator)

    Great comments from Rocky, Abid, etc.!  Let me expound on this with my three cents worth.

    • If the goal is asset protection, the appropriate insurance policy, including adequate liability coverage is critical as well.
    • Before you go very far in choosing and implementing your asset protection strategy, be sure to consult with an accountant who stays current and who has real estate experience.  If you don't do this, you likely won't be able to take full advantage of all the available tax savings.
    • Once upon a time in the earlier part of this millenium, rent property owners could leverage the equity in their rentals with lines of credit.  However, even in those days, lenders required that you own the property; not a trust, corporation, LLC, etc.  If the lending powers that  be ever loosen up again enough to allow rent property owners to leverage the equity in their rentals, lenders are almost certain to still require personal ownership before approving an equity line of credit.  You don't want to have an asset protection structure that will be too expensive and/or complicated to unwind if you'd like to get access to the cheap and easy capital of a line of credit.

    Thanks,

    Robin (817) 300-1132, robin@dfwreiclub.com

    Last modified: 18 May 2012 1:41 AM | Robin Carriger (Administrator)
Powered by Wild Apricot Membership Software