Goodbye LLC
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Goodbye LLC (by DJ [VA]) Apr 3, 2024 7:18 PM
       Goodbye LLC (by DJ [VA]) Apr 3, 2024 7:21 PM
       Goodbye LLC (by 6x6 [TN]) Apr 3, 2024 7:42 PM
       Goodbye LLC (by RB [TN]) Apr 3, 2024 8:06 PM
       Goodbye LLC (by plenty [MO]) Apr 3, 2024 8:29 PM
       Goodbye LLC (by WMH [NC]) Apr 3, 2024 8:39 PM
       Goodbye LLC (by zero [IN]) Apr 4, 2024 8:43 AM
       Goodbye LLC (by Kevin [FL]) Apr 4, 2024 9:02 AM
       Goodbye LLC (by S i d [MO]) Apr 4, 2024 9:14 AM
       Goodbye LLC (by Ken [NY]) Apr 4, 2024 9:27 AM
       Goodbye LLC (by Busy [WI]) Apr 4, 2024 10:16 AM
       Goodbye LLC (by GKARL [PA]) Apr 4, 2024 10:44 AM
       Goodbye LLC (by Ken [NY]) Apr 4, 2024 11:08 AM
       Goodbye LLC (by Busy [WI]) Apr 4, 2024 11:18 AM
       Goodbye LLC (by Ken [NY]) Apr 4, 2024 11:24 AM
       Goodbye LLC (by Ray-N-Pa [PA]) Apr 4, 2024 1:46 PM
       Goodbye LLC (by John... [MI]) Apr 4, 2024 3:05 PM

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Goodbye LLC (by DJ [VA]) Posted on: Apr 3, 2024 7:18 PM

There was another post (or 2) on this topic previously.

I said I was dropping my LLC and continuing to do business under a DBA (doing business as) alias.

I remember someone in that thread warning others that is you do that, you will not be able to use the the same book-keeping and tax deductions.

I want to let you all know that is completely false - as verified by my tax preparer. Absolutely nothing changes, except not having "LLC" at the end of the business name any more.

I've done this partly because of the pending new requirements - actually, I was motivated to do it NOW due to that, and because the bill to register with the state for another year came while I was already thinking of it.

The biggest reason is because - unless you hold and document meetings where all major decisions are made, and keep those minutes, and do everything properly - there is really no protection for you personally AT ALL. The LLC will be considered invalid and will be dismissed in any court case. If you didn't know this, your LLC is not running properly or doing anything for you, either.

I'm too lazy to keep up with all that, for the tiny bit of property I own.

I'll get a HELOC on free-and-clear property, to make it appear encumbered on a title search, and stay insured. That seems sufficient for me.

Keeping the DBA makes me still look professional.

Goodbye LLC (by DJ [VA]) Posted on: Apr 3, 2024 7:21 PM

To be clear, I had a single-member LLC, which simply passed through to my personal return at tax time.

Goodbye LLC (by 6x6 [TN]) Posted on: Apr 3, 2024 7:42 PM

Good information.

Keep it simple.

Goodbye LLC (by RB [TN]) Posted on: Apr 3, 2024 8:06 PM


I never went the LLC route.

Goodbye LLC (by plenty [MO]) Posted on: Apr 3, 2024 8:29 PM


Goodbye LLC (by WMH [NC]) Posted on: Apr 3, 2024 8:39 PM

We didn't go the LLC route for the privacy and protection - we had always heard that it was easy to "pierce the veil" of ownership. But for estate purposes, they make things easier. Our Trust owns the LLCs and they will be distributed to the kids that way. So instead of worrying about who gets each and every house, we just make sure we buy them in the correct LLC to ensure the right kid is getting them. Makes several things easier. And if we want to change the way a particular property is left, also super easy to do.

But you can find the owners or at least the managing members of any LLC online with the NC Dept of Corporations with a 2 second search, so unless you set up a web of them with shell companies owning shell companies, you can always be found.

Goodbye LLC (by zero [IN]) Posted on: Apr 4, 2024 8:43 AM

Very interesting information here.

Now I have more to consider. If I am not protected at all with the LLC then why have it?

I have not moved toward trusts just yet, but it is on my radar. --107.147.xx.xx

Goodbye LLC (by Kevin [FL]) Posted on: Apr 4, 2024 9:02 AM

My attorney says many times he can "pierce the veil" of ownership due to mistakes made by the LLC owners.

Goodbye LLC (by S i d [MO]) Posted on: Apr 4, 2024 9:14 AM

I've been considering the same. LLCs require an attorney to represent them in my state, and the cost of legal services has increased dramatically the past few years. Although I'm a huge fan of "take the tools out of your truck", there are certain tasks that are quick and easy to do and save tons of money.

I recently had a bad situation where a tenant was being evicted for non-payment of rent, and they requested (and were granted) multiple continuances. My attorney just let it happen, and every time I had to show up in court it earned me another $300 charge from their law office. Used to be that was included in the price, but now everything gets billed as extra add ons. $3,000 of legal fees later... we got them out. But dang, every phone or email call was billed at a minimum of 15 minutes per item at the rate of $300 per hour, even if it was only a 1 sentence "hey do I need to send you such and such?". I can't communicate with them without racking up huge charges. Too, I've seen bills for "research" added in lately. What!?! These guys are supposed to be the local eviction mill: they need to KNOW this stuff, not be researching it on my dime.

If I get rid of the LLC, it will take up a little more of my time, but it will save a pile of money. The forms are available online. I do have to file them in person, but the courthouse is only 15 minutes away. Do them over lunch or after I get off work. I'm not seeing the value in hiring an attorney the way I used to, and with expenses piling up... it's tempting to just get 'er done myself.

They've also gotten slower lately. Used to be if I sent a filing in by 11 am, it would be filed that same day in the courthouse. Now, it sometimes takes 2-3 days... more lost rent.

The cost will be a simple deed moving the property names from the LLC to my DBA business name, which will be the same, minus the "LLC".

Haven't pulled the trigger yet, but again... seriously considering it.


Goodbye LLC (by Ken [NY]) Posted on: Apr 4, 2024 9:27 AM

I will keep my LLCs. As much as it may not help in a lawsuit i have 1 LLC that everyone knows about, it is on my business cards,newspaper ads etc but i have others that are not so well known, if an attorney looks me up sure he will see my LLC that everyone knows about but probably not find the others and the main LLC does not have much activity.I prefer it to look professional as opposed to mom and pop --74.77.xx.xx

Goodbye LLC (by Busy [WI]) Posted on: Apr 4, 2024 10:16 AM

Heehee Ken! Not trying to pick on you, as I do believe it makes you look professional to tenants, BUT : when I was regularly attending the local REIA breakfasts, I came to see a well-thought out business card, with an LLC on the name as a symbol of a real-estate wanna-be. Was trendy for a while there for those wanting to get into the biz to set up fancy trappings of 'looking professional' when they had yet to get any skin in the game. One particular woman stood out; she used to bug me repeatedly, wanting me to somehow make her a part of my real estate plan. She owned nothing, didn't have money to loan, nor trade skills. Apparently she was going to 'find' the 'deals' and sell me the deals at her inflated prices. This was at a time when I was buying my houses, for about 10k, straight off of MLS. Had I had access to more cash ( well, hubby and I had plenty in savings, but he wasn't on board, so I couldn't touch our joint assets) I could have bought dozens of properties for less than a good used car. So, why this wanna-be felt she offered me a value that I needed to pay for, I dunno.

I still chuckle about that well-dressed woman, with the fancy business cards, and her LLC. She had nothing to offer in terms of actual value or equity to me, at least.

To tenants, yeah, the cards and the LLC might spell professional. I just never got big enough to warrant those. As I do most of the work myself, I'd be named as an additional defendant if there were ever a lawsuit, so no point for me. Though we still haven't gotten with an estate attorney to update our will, put things in trusts, all of that. Have an appointment soon.

Goodbye LLC (by GKARL [PA]) Posted on: Apr 4, 2024 10:44 AM

Any good sleuth can determine who owns an LLC, so it's also of questionable value for creating anonymity in addition to lack of legal insulation. I had to do one LLC for tax purposes but outside of that, there's no compelling reason to create one. Fortunately in PA, I can still represent myself as an LLC in an eviction proceeding.

Goodbye LLC (by Ken [NY]) Posted on: Apr 4, 2024 11:08 AM

Busy, I hear from wholesalers all the time but they never have a deal good enough.I have bought and sold more houses than most realtors have represented othere selling.I have managers now so i dont deal with my tenants directly but i do care how i appear to desperate sellers, i want to look like the guy with the money and knowledge to solve there problems.

GKARL, I agree it can be determined easily who owns a given LLC but i provide 1 LLC intentionally so if anyone goes looking they will generally stop there,it is much harder to find my other LLCs if they dont know the names.I have been sued plenty of times and generally dont do things that will get me sued but i am not the most likeable guy from a tenant perspective. The other thing i like about LLCs is if every house i ever owned was in my personal name it would be a large volume showing up in my name and create a target, i can just stop using a LLC at anytime and create a new one, i do them myself quick and easy, and start with a new name that looks like brand new guy to most people --74.77.xx.xx

Goodbye LLC (by Busy [WI]) Posted on: Apr 4, 2024 11:18 AM

Ken, I hadn't thought of how one appears to sellers. So, maybe there was potential value for that wholesaler to have her business cards and LLC.

Ken, I am also awed by your business; you employ people, you return bad housing stock to livable condition, and solve problems for frustrated owners. Good on ya!

Goodbye LLC (by Ken [NY]) Posted on: Apr 4, 2024 11:24 AM

Busy- thank you. most so called wholesalers never do a deal.I dont think it is worth the bother or expense for most of them to get a LLC or any other expenses beyond what is necessary until they can prove to themselves that they can actually do a few deals.Wholesaling is difficult,you have to buy a house so cheap someone like me will actually pay more than they paid for it,not easy to do especially right now and these people usually have no market knowledge, i think it would be easier to just get licensed and hang around a busy office and learn from experienced agents --74.77.xx.xx

Goodbye LLC (by Ray-N-Pa [PA]) Posted on: Apr 4, 2024 1:46 PM

I am keeping all mine.

I use one strictly for Equity Stripping purposes.

I keep my collection of rentals split up with two other LLCs managing the various land trusts. I don't want all my eggs in one basket.

I keep another for purchasing reasons. I have a property were I will be needing to extend the septic system. I simply do not have the room on that land, so I want to pick up a parcel off the neighbors. An LLC not tied to the original land trust can make the buyer invisible

Goodbye LLC (by John... [MI]) Posted on: Apr 4, 2024 3:05 PM

It doesn't even need to be a "mistake" for a lawyer to pierce the veil of an LLC. Remember that LLCs were never designed to Limited the Liability of a MANAGING MEMBER -- which is what all of us would likely be. They were made to protect non-managing members who don't make any business decisions. That isn't us.

There are a few exception states now, sure, but, in general, LLCs aren't meant to protect (or even hide) us. Most of us would be much better off with an umbrella insurance policy.

As for estates and such, a trust is better at that in almost all cases. LLC doesn't do much there.

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