How To Form A Real Estate LLC

if you're new it's a real estate

investing you're probably focused on

building your business and generating

sales while these are both important of

course it's arguably even more important

to take the necessary steps that come

with forming a real estate LLC why

because when you form a real estate LLC

you and your business become two

separate entities

this means you can purchase an own real

estate in the name of your LLC so that

you are not personally liable for any

potential debt or lawsuits associated

with your business so how does one go

about creating an LLC keep watching

because we break it down for you in just

six simple steps step one of forming a

real estate LLC is to research your

local markets regulations as laws and

fees will vary state to state most

investors choose to incorporate their

business in the state where they conduct

the most business but others will choose

states with more relaxed business laws

like Nevada and Delaware note that if

you conduct business or have a physical

business across different states you

will need to register a foreign LLC in

each location you can find all the

information you need on your Secretary

of State's website once you choose where

you want to register your LLC step 2 is

to choose a business name this step is

more important than you might think how

so well one the most common reason LLC

applications are rejected is because of

problems associated with the business

name avoid this in advance by

researching online to ensure that your

desired name is available it's always

helpful to have a back-up plan to

remember your business name should be

unique memorable and enticing to attract

clients we have an entire video

dedicated to providing tips on picking

the perfect real estate business name

check it out

the next step is to file your articles

of organization

the articles of organization for an LLC

is essentially the blueprint of your


it should state the company name primary

address start date business owner names

called members and a brief description

of how you plan to conduct business but

keep in mind that each state

specifications will vary this part of

the process is also where you will pay

any fees associated with starting an LLC

costs range from one hundred to one

thousand dollars depending on your state

the size of your business and whether or

not you choose to file your LLC alone or

with the help of a lawyer be sure to

submit your articles of organization to

your Secretary of State and expect to

wait several weeks for approval if you

form an LLC in California Delaware Maine

Missouri or New York you will be

required to complete step four create an

operating agreement an operating

agreement states how your business will

be divided among members how decisions

will be made within the company and what

would happen in the case that one or

more members choose to leave the company

keep in mind that it can be a smart idea

to include an operating agreement in

your business plan even if your state

doesn't require it this is because it

will protect any and all members by

anticipating possible scenarios that

could harm the business structure if

your LLC is formed in Arizona Nebraska

or New York you will be required to

complete step 5 publish an intent to

file publish your intent to file as an

ad in your local newspaper to state that

you intend to create an LLC in that

particular state investors generally run

ads for three to six weeks subsequently

your newspaper will send you back an

affidavit of publication which you will

need to submit to your Secretary of

State's office

good news your LLC is almost complete

the final step that comes with forming a

real estate LLC is to obtain proper

business licenses and permits again this

will vary from location to location but

almost every state will require a

general business license sales tax


and a professional license check out the

US Small Business Administration's

website to find out which licenses and

permits your market requires protect

yourself from personal liability while

simultaneously protecting your business

from any unpredictable legal or

financial issue that may arise by

setting up your real estate LLC follow

our step-by-step guide to get your

business started today have questions

about forming an LLC in your market let

us know in the comments and as always if

you enjoyed learning today don't forget

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