Carlos Cornejo's Blog
20
Oct

Buy on our own behalf or on behalf of a company?

During the last decade of limited liability companies (limited liability company - LLC) have become the preferred company form for purchase and real estate in the United States. Despite the benefits offered by an LLC, is not necessarily the best way to acquire real estate for all people. For many investors, the cost of forming and maintaining a company uncertain demand possibility not worth.

BENEFITS OF PURCHASING THROUGH AN LLC

  • Protect possible claims related to the property owner. I.e. in the case of a single demand they can go against that property and not against other assets or personal assets.
  • Allows you to deduct the expenses generated by the property.
  • It allows owners both avoidance of double taxation on income generated by income as in the revaluation of the property. Therefore, the profits generated will be "paid" only by the LLC and not in the distribution of those profits to the owners.
  • avoid estate taxes, therefore, upon the death of the owner of the company the legal entity never dies, thus reducing the amount of inheritance tax.
  • If the LLC is formed by a single member (single-member LLC) could deduct interest on the mortgage loan.
  • LLCs, tend to pay one lower rate of registration and maintenance than other types of corporations.
  • Unlike other types of corporations, being a foreigner resident cannot form an LLC.
  • Great flexibility in the distribution of earnings.

CAN I OPEN A LLC FOR EACH PROPERTY?

Greater protection can be obtained through the formation of an LLC for each property. Thus the investor limits liability to each of the properties. If multiple properties are under a same LLC, the responsibility of a property could expose other properties. Conversely, if each LLC is the owner of a property, the maximum liability shall be subject only to that property.
However, due to the costs of opening, administration and maintenance of multiple LLC, is common to investors to maintain multiple properties under a same LLC.

COST ESTIMATES OF A LLC

  • Cost of opening approximately between $400 - $700
  • Annual renewal fee ranges from $200 (Florida) to $400 (Delaware) approximately.
  • Fees of the counter by administration and annual tax return (before May 1 while that Delaware before the 1st of June.) rely on service and structure for each client.

WOULD THAT YOU NEED TO OPEN AN LLC?

  • Name available
  • A postal address in the United States
  • names of shareholders. (They can be spouse and spouse)
  • Prepare constitutive act of the company (the counter work)
  • Operation (the counter work) agreement

HOW LONG DOES THE OPENING PROCESS TAKE?

The process takes between 3-5 working days in Florida and 5 to 7 working days in Delaware.

Florida vs Delaware LLC
The difference more elemental between one and the other is the privacy.

  • Florida is of public record
  • Delaware information is anonymous.

I BOUGHT A PERSONAL NAME, I CAN TRANSFER IT TO AN LLC?

It is important to plan this before carrying out the transaction, however, if I already make the acquisition to personal name, while it is possible to transfer the property, it is important you advice with an accountant and/or attorney to analyze your case specific and to determine the possible implications legal and financial. Among them, it is important to determine:

  • If you apply the Firpta (foreign investors)
  • Transfer costs
  • If taken for sale


LEGAL Note: These provisions are complicated and require the expertise of a real lawyer and/or accountant to evaluate the potential implications. At any time you must take this information as advice.



Carlos Cornejo
3371108
Mobile: 7862509463
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Luxur Realty LLC
2786 NW 79th Avenue
Doral, Fl 33178
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