Formation of LLC(s) for Real Estate Investing
LLC Formations for Real Estate Investing/Developing
Strategic, Legal, and Tax-Savvy Structuring for California Properties
At Bassin law, our attorneys at Scott Bassin Real Estate Attorney and Broker, and offers comprehensive, high-level guidance on LLC formations tailored specifically for real estate.
If you’re considering asset protection, privacy, or long-term estate planning, we help you evaluate whether an LLC is right for your needs our lawyers can ensure it’s formed and maintained properly. We offer consultations are available in-person, via video, or by phone.
Why Should you Hold Real Estate in an LLC?
Real estate investorys should consider forming an LLC (Limited Liability Company) to hold real estate. LLC’s can offer many benefits. Such as, Privacy, limited liability from lawsuit, and pottiential tax savings. However, they must structured correctly according to your specific needs.
Real estate investors form llcs for :
Privacy from public ownership records and residents
Liability protection from tenant or property-related lawsuits
Tax advantages through pass-through taxation (vs. double taxation faced by C-Corporations)
Estate planning and generational wealth transfer
Avoiding reassessment of property taxes in some circumstances
- Multi owner investment: Forming an LLC allows others to move easily invest in your real estate if your are entering into a partnerhsip with multiple parties.
We regularly assist clients in the San franisco bay area, Oakland, San Jose, and Marin County and throughout California with forming LLCs for properties.
Thinking about forming an LLC here is what you need to consider.
Privacy
While an LLC can provide anonymity, more is needed to truly protect your identities. The state requires the identity of the parting creating the LLC to be public record. Hirining a tursted attorney or third party to create and file the LLC hides names from public filings. There are still required disclosures of identities under new federal FinCEN regulations.
Liability Protection
LLC liability protections limit your liability to only the assets placed in the LLC if the entity is properly formed and used. This means all leases, payments, and contracts must be in the LLC’s name, and personal and business finances must remain separate.
Mortgages
If you wish to transferr a mortgaged property into an LLC, such transfer may violate your lender’s “due on sale” clause. Our Real estate lawyers help you assess risk and alternatives.
Challenges and Costs of Forming an LLC
The State of Califonria requires a $800 Minimum Annual Franchise Tax.
LLCs must be maintianed to ensure they are legally complaint and their finances are structued to provide liailbity and financial protection to the property owners. This is done through Ongoing compliance, filings, and strategic updates. LLC owners must watch out for issues with mortgages with tranfering property to an LLC is it can trigger a “due on sale” triggers. Lastly LLCs allow multiple owners to easily invest or own part of hte property this can create conflict if between owners and having a savy real estate lawyer create your LLC can prevent future conflicts between investors.
Our Process & Pricing
We begin every LLC formation with a personal consultation to determine the right structure for your goals. Our fees include flat-rate packages for clarity and transparency.
Pricing starts at $1,000 for a basic single-member LLC (consultation credit applied).Property transfers into the LLC can be added at modest additional cost.
Here are the required intial filing fees by the state of California:
- $70 for the Initial Filing and $800 for the State Annual Franchise Tax
- After that there will be a $ 20 fee for the statement of information (filed twice a year.
- We also perform Rush Filing which cost an extra $350 in state fees.
Start the Process Today
Whether you own a single rental condo or a portfolio of investment properties, we’ll help you explore whether an LLC is the right move our Real Estate attorneys have more than 40 years of experience advising investors and can and guide you every step of the way.