How to Set Up an LLC to Protect Yourself in Real Estate Investing

One of the simplest business structures for your real estate investing activities is the LLC, or Limited Liability Company. Real estate investors have discovered that this is one of the simplest, most cost-effective ways of limiting risk and personal financial liability.

An LLC gives you the flexibility and ease of operation of being an individual, but still grants you many of the legal protections of a corporation. As a result, many real estate investors choose to take title to property in the name of an LLC.

Setting up an LLC is a relatively pain-free operation. The process is simple. Most states now permit online applications, but if you’re more comfortable you also have the option of printing out the forms, filling them out, and mailing them to the appropriate office.

While some real estate investors choose to seek professional assistance in filing the required paperwork, the process is simple enough that even a beginning investor can easily complete it.

Each state has slightly different requirements, but they are basically the same regardless of where you live. Some of the questions on the form include the name and tax identification number for the LLC, as well as the legal address, etc.

You simply fill the form out, include the appropriate filing fee (usually about $350) and mail it to the Secretary of State in the state in which you are making application.

The filing process is simple, and in most cases fairly straightforward. It makes perfect sense to protect yourself – and your assets – by taking these simple steps.

Every state has a variety of resources available for real estate investors on their website. If you don’t yet have a website of your own, you should consider entering the 21st century. A website can help you to market your business and build a substantial real estate investing portfolio. An LLC can help you keep it.

Secretaries of State For LLC Application and Filing Information

To find the website for the Secretary of State in your state, just do a simple Google search such as “Secretary of State Ohio” (obviously replacing “Ohio” with your own state. In most cases it will be the top result.

Of course, whether an LLC is the right type of business entity you depends on your circumstances. I’d recommend talking to an attorney and/or accountant to get their advice about what’s best for you. But I can tell you that many real estate investors I know have used LLC’s. So do a little homework and if you decide an LLC is right for you, just follow the simple steps to get yours set up.