LLC Funding: 6 Financing Options for Business Startups

Many business ventures will fail in the early stages, often because of funding issues at the outset. Surviving the startup phase requires sufficient capital to cover expenses and a business plan to entice potential investors. The question then becomes: How can you approach LLC funding beyond simply having a good idea and a winning smile?

If your business startup is just getting off the ground, here are a couple of articles you may want to check out:

And if you're ready to explore the world of small business funding, here are a few ideas.

Funding Via Peer-to-Peer (P2P) Lending Sites

Social lending websites now represent when one of the most popular ways for startups to crowdfund their ventures. Sites like these provide lending platforms for entrepreneurs providing them with easy access to both individual and institutional investors. As an alternative to traditional lending institutions, P2P crowdfunding sites are growing quickly, and represent an excellent opportunity for entrepreneurs to secure additional funds for their startup.

Funding Via Initial Coin Offering (ICO)

 This is a complex process, but it’s gaining popularity as awareness about cryptocurrencies grows. An ICO, also known as an Initial Coin Offering, is similar to a cryptocurrency insofar as it uses distributed ledger and blockchain technology to offer potential investors something analogous to an IPO. Determining whether this option is right for you will require careful consideration. Nonetheless, funding a startup in this manner is becoming more accessible and popular.

Government Sponsored Grants and Loans For Startups

Every once in a while, Uncle Sam does something useful. Government sponsored lending programs offer incentives to traditional institutions like banks and credit unions. They target three main areas:
 Industries where they want to see growth (eg: green energy or energy efficient products)

  1. Individuals of a certain demographic (eg: military veterans)
  2. Certain locations (eg: struggling economic areas)

For those interested in pursuing this avenue, have a look at the Small Business Administration’s search tool.

Funding Via Credit Cards (Be Careful!)

 
It’s not an abnormal practice to utilize credit cards for short-term financing for your LLC, especially if you are new to the game and don’t have a lot of experience under your belt. Traditional methods of securing loans, such as banks and credit unions, may be wary about lending to inexperienced investors. Nonetheless, entrepreneurs have started ventures as massive as Google using only personal credit cards.
There is another option as well. Credit cards can be taken out in the business’s name, which is an option well worth looking into. One caveat here is that you want to avoid racking up too much credit card debt. Ideally, credit cards can be used as an option to bolster pre-existing capital.

Leveraging Your Personal Network

You’ve got friends and relatives. Don’t be afraid to ask them for loans. Just make sure you pay them back!

Startup Loans Against Collateral

One last option for those that are new to the game and are striking out with traditional institutions like banks or credit unions is to take out a loan against your personal assets. Collateral-based loans should be easier to obtain, but failure in your venture will result in the forfeiture of your assets. For some folks, the risk will be worth it.

Professional LLC Record Keeping Rules

Record keeping for LLCs is significantly less demanding than corporations. Nonetheless, certain rules must be followed in order to keep IRS happy and maintain LLC status. While laws will vary from state to state on what documents need to be kept, there are some basics that are universal to all states and represent good practice in general.

LLC Formation Documentation

No matter which state you reside in, you’re going to need to keep a copy of the document you filed with the Secretary of State’s office when you formed your LLC. In most states, this document is simply referred to as the “articles of organization”. This should contain your LLC’s:

This represents the bare minimum of information these documents should contain. If there are any amendments to that information, that should be kept as well.
Any state documents that you received in response to your petition from the Secretary of State’s office should be kept on hand.

LLC Operating Agreement

The Operating Agreement allows you to formally structure your relationship to the co-owners This includes information regarding percentages of ownership. It also details the responsibilities of each partner. The documents ensure that the courts will respect your status as an LLC.
The Operating Agreement should include:

While this information need not be included in the Operating Agreement, it should be kept on-hand with the Operating Agreement.

Membership and Managers

LLCs should keep the names and addresses of current and past members as well as current and past managers on hand.

Taxes and Finances

Income tax returns dating back at least three years should be kept handy. It’s probably best to retain this information indefinitely, but three years is the timeframe in which the IRS can perform an audit.
In addition, records that can prove income and all business expenditures should be kept on hand as well.
The supporting records can include information such as:

In addition, LLCs are required to pay employment taxes. These records should be kept for a minimum of four years.
They will include:

LLCs should also retain information concerning business contracts and any financial statements they have.
Remember, your business’s status as an LLC may depend on the quality of your company recording keeping. Ensuring you can provide this information on demand is an important part of maintain your LLC status.
 

How a Land Trust With LLC As Beneficiary Benefits Property Owners and Investors

Having a land trust is a good idea for property owners and real estate investors. Land trusts are especially a good idea in case you own more than one property and don't want everyone to know you own so many properties.

You can choose whoever you want for your land trust.  However, it should be someone you know and trust since your property title will be going to them to keep it safe and private for you. While your property is in a land trust's name, no one can see that you own it. For example, the title company cannot announce in the local newspaper that you own property (like they do with everyone else).

How to Start a Land Trust

First, you have to choose someone or a certain business to be your land trust. You don't have to choose an individual if you can't find one to do it for you. You also have the option to choose a business if the business owner agrees to do it.

Whichever one you choose, you need two legal documents for the land trust. The first legal document is a trust agreement between the owner of the property and the person or business who will be the land trust. The second legal document is the deed of the property from the owner to the trust.

Although the land trust will be holding on to the deed of the property, they will not be the owner of the property and will not receive any benefits from holding the deed and having their name on it. The owner still has all rights. The land trust is just for privacy. The trust agreement is also private and only you and the land trust know about the agreement.

Land Trust With LLC As Beneficiary for Privacy and Asset Protection

Although a land trust is for privacy and asset protection, a land trust does not receive the benefits that an LLC or a business does. However, if someone falls on your property and gets hurt, the beneficiary will be held responsible. This is the main reason to use an LLC or a regular business to stand in as the beneficiary of the property. The reason for this is that LLCs and other businesses are protected from something like this happening.

That was just the first reason for obtaining an LLC or other businesses as a land trust. The second reason to do so is because they receive tax benefits. This means that the transfer of the property can be done tax-free.

A third reason to use an LLC is that many attorneys and accountants don't even know what a land trust is in many states. Because of this, you won't have to worry about litigators looking at your property and thinking you have deep pockets. This way, they won't be trying to file a lawsuit against you.

How LLC Managers are Not Liable for Fraudulent Statements on Behalf of the LLC

LLC stands for limited liability corporation and it is a business structure that combines that of a sole proprietor with a limited liability of a corporation. It combines the taxation of the two together. Being a manager of an LLC means you are not liable for fraudulent statements for the LLC, however. The reason for this is because, although you are a manager of the LLC, this does not mean you are liable for any other member of the LLC. Members of an LLC are referred to as either agents or actors. Keep reading to learn more about why this is true.

How Actors May or May Not Be Liable for Problems Within the LLC

There are three different determining factors to think about when trying to determine whether an actor is or is not liable when acting on behalf of an LLC. They include the following:

Difference Between Contract and Tort

Although agents or actors on behalf of an LLC are applicable to the same rules as other agents, when it comes to a binding contract between an LLC and an actor, they are not liable to a third party outside of an LLC when something happens. However, the rule that protects these actors is only because the third party is relying on the fact that the actor is performing under the binding contract.
When it comes to a tort that happens because of damage done to a third party, the rules are a little bit different. If something happens to a third party because of the actor's tortious conduct, they are liable to the third party. This is especially true if harm comes to the third party because of the tort or damage to their property happens. This is true whether or not the actor is acting on behalf of the LLC or by themselves.

Economic Loss Vs. Physical Harm

When it comes to economic loss, the rule is that the actor on behalf of the LLC is not liable for economic loss. However, when you are talking about physical harm, that is a different story. The actor is liable for harming another person. When someone has only suffered economic loss, the agent acting on behalf of the LLC is not liable for their total monetary loss. However, there are exceptions to this rule. This protection does not apply toward professional services or even fraud.
 

Advantages of Having an LLC Over Insurance For Asset Protection

Advantages of Having an LLC Over Insurance For Asset Protection

Insurance will not protect you from most lawsuits that will happen regarding the transaction of your buying and selling of real estate. Every time that you're entering into a contract. Every time you actually sell a piece of property, every time you lease to a new tenant. These are all things insurance doesn't cover. Because of that, the only way for you to save your hard earned dollars is an asset protection strategy. That is the proper LLC and company structure.

Set up an asset protection consultation today!

One Property Per LLC Is Great. But A Property Management Company Is Better.

 

A common asset protection strategy for a real estate investor as to have one property per LLC. And that makes sense because if you have a lawsuit with one property, you don't want it affecting your other assets.

Say we have one LLC with Property A held inside of it and a completely different LLC with Property B held inside of it.

This is a great situation. If you have a lawsuit involving Property A, it's not going to affect Property B.

To further increase your protections, you should have a corporation which acts as your property management company.

This company is completely separate from the LLCs, which hold your assets. And because it's completely separate, if you have a contractor sue you, if you have a tenant sue you, if you have anybody else that deals with the business of running your real estate company that would sue you. The property management company is the entity that they're going to be able to sue.

They won't have a claim against your LLC properties (Property A and Property B). And that's what we want. It protects your credit score if you are sued as an individual (if you ran the business yourself) and it gives you the asset protection you need.

Property, LLC, and Company Structure

Property, LLC, and Company Structure

As a real estate investor, you have to understand that lawsuits are a business and they're serious. Insurance will not protect you from most lawsuits that will happen regarding the transaction of your buying and selling of real estate. Every time you're entering into a contract, every time you actually sell a piece of property, every time you're leasing a property to a tenant, these are all things that insurance doesn't cover. The only thing that is going to save you and your hard earned dollars is an asset protection strategy. That is the property LLC and company structure. What I do, is I make it, so that if anybody looks to sue you, it'll look like you own nothing. That if they were to sue you, that it'll make it a nightmare for them to try to come after you. And what does a nightmare mean in litigation? It means having to risk thousands and thousands of dollars with the mere hope of being able to get something out of the other party. Now ask yourself, as an investor, and as a businessperson, do you go to Vegas rolling dice, hoping that you'll recover? Probably not, and neither will an attorney, that they might have to take the case on contingency. Unless attorneys are in the business of only taking basically guaranteed wins. And we make it such that it is a gamble for them to try to come after your money. They just won't do it and that's what we specialize in. We make it as difficult as possible at Royal Legal Solutions for anybody to find out what you own or for them to succeed against you in a lawsuit. And even if they were to succeed against you in a lawsuit, their ability to come after your assets would be minimalized to the fullest extent of the law. My name is Scott Royal Smith, I'm with Royal Legal Solutions. I'm an asset protection attorney who specializes in real estate asset protection. I'm a real estate investor myself and I'd like to help you.

How the 'Three Company' Structure Protects Real Estate Investors

A typical real estate investor should be looking at a three-company structure.

The first of these companies should be a buy and hold LLC. The buy and hold LLC is going to be for long-term rentals. It's going to hold a number of different properties that you will be holding for longer than a year.

The next company that you're gonna have is your fix and flip LLC. Those are properties that you're gonna be holding for less than a year.

The reason that we need two of these is because they have different tax treatment. Your buy and hold is going to be a long-term capital gains taxation, your fix and flip is gonna be short-term capital gains.

Your third company will be your operating company (corporation or operating LLC). Typically we use corporations for some instances and LLCs for other instances. The corporation shields you from any personal liability in conducting your business. If you run your business personally, you're collecting the rent, you're negotiating with contractors, entering the contract, etc. This all can mean a lawsuit against you personally.

Even if you were smart and protected all of your assets inside of the LLC, what will happen is that a judgement against you gets recorded onto your credit report, impacting your credit score. The lower the credit score you have, your less ability to have financing. And that means real dollars out of your pocket.

 

Real Estate Investment Fund Structure Is Essential for Protecting Your Assets

I often get asked whether a retirement fund such as IRA can be used to invest in real estate. It’s unfortunate that many real estate investors mistakenly assume that their retirement account can only be invested in the stock market, mutual funds or bank CDs. Few investors actually realize that real estate can be held in an IRA account with a self-directed IRA LLC. This structure allows you to invest in any type of real estate deal that doesn’t include disqualified persons.

What is a Self-Directed IRA LLC and How Does It Work?

Also referred to as a real estate IRA LLC, this is a tax court and IRS approved structure that allows you to use the funds in your IRA account to buy real estate and make almost any other type of investment tax-free. In this arrangement, you won’t need the consent of a custodian to make any real estate investments. To purchase real estate, all you need to do it to write a check from your Self-Directed IRA bank account.

The LLC acts as your personal investment fund that is fully owned by the IRA. The cash you have in your IRA is invested into the LLC. You only get to serve as a manager (non-compensated, of course) of this LLC. However, you will have authority to direct the capital held therein into investments of your choosing.  It’s just like putting your money in a conventional IRA that invests into a mutual find, but this time, you’re the fund manager.

Why Use a Self-Directed IRA LLC and Does It Provide Liability Coverage?

Much like the Series LLC that I highly recommend, a self-directed IRA LLC will give you strong creditor and asset protection benefits. Since you’re investing through an LLC owned by your IRA, you gain an extra layer of liability protection as opposed to investing as an individual. You’ll be able to keep your personal assets safe from creditors and would be litigants both outside and inside of bankruptcy. You’re also covered for up to a million bucks in bankruptcy protection.

Should a lawsuit be filed against property you hold in an IRA LLC, both you and the IRA would be shielded from liability or claims associated with the LLC. `For an asset class such as real estate, which is prone to litigation, the IRA LLC model is an excellent consideration.

Some of the other benefits include:

  1. Tax benefits where the proceeds of your investments are tax deferred.
  2. Ability to invest in all sorts of investments.
  3. Full control of your retirement funds.
  4. Speed and flexibility since you don’t need to consult or seek approval to strike a hot deal.
  5. Lower fees as you don’t have to pay a custodian and valuation fees.

While it all sounds honky-dory, you want to steer clear of taking the self-directed IRA LLC option if you live in California. 

Advantages of Using an LLC to Buy Investment Property

With 2,654 new renters entering the market every day, it’s easy to see why owning investment property is a lucrative and exciting venture.

However, in an increasingly litigious society, your rental property can create liabilities. This is why protecting your assets through an investment property LLC (limited liability corporation) is a smart approach.

Let's go through the biggest advantages of using an LLC to buy investment property:

Protection of Personal Assets

You’ll get sued by tenants and predatory litigants for the flimsiest reasons. Sure, if a tenant trips on a wobbly staircase, they can sue you for damages. But some injuries aren't your fault. That doesn't mean a disagreement won't land you in court.  

Forming an LLC enables you to protect your personal assets since your liability is limited to the amount of equity you hold in the entity. Any amount beyond these parameters is the responsibility of the LLC. This means your personal assets won’t be affected.  We recommend that you consult an asset protection expert for sound advice on the type of structure to use for your particular situation. 

Separation of Properties

Using an LLC not only allows you to separate your property from your personal assets but also your rental properties from each other. Setting up a separate LLC for each property insulates it from liability claims. This means that if someone filed a lawsuit on one property, then the rest of your properties would not be affected by the claim.

If you have multiple pieces of property, go for a series LLC instead of a traditional LLC. A series LLC includes an umbrella LLC that oversees other LLCs that are separate legal entities for liability purposes. Some of the benefits of setting up a series LLC over an LLC include:

Tax Advantages

Establishing an LLC allows you to take advantage of “pass-through” taxation whereby all income passes through to you as the business owner. This way, you get to report the LLC's losses or profits on individual tax returns, which attract a lower rate. This reduces the amount of money taken out of your income for taxes.

Easier Ownership Transfer

Want to transfer your property through gifting or inheritance at some point? Then an LLC is the way to go. You won’t need to execute a new deed to transfer ownership shares in the LLC, and you’ll have less paperwork and lower fees.  

It is recommended that you set up the LLC sooner rather than later to avoid the hustle of trying to convince your lender to approve the transfer after you’ve made the purchase.

Whether you have one or several properties, you will definitely benefit from creating an LLC and structuring your business the right way.

Asset Protection: Insurance or Something More?

When it comes to asset protection, insurance companies are basically a criminal business.

They collect premiums, then deny coverage when you need them to cover something they should cover. If you have a big claim, you'll have to sue the insurance company just to get them to pay.

As an investor, you shouldn't have to rely on insurance for asset protection. Sure, your policy will cover the slip and fall accident that happened on your rental property's front porch because it was a little icy outside.

But what about when your tenant falls through a staircase and ends up permanently disabled? All of a sudden the insurance company will say "this is a case of gross negligence outside of your policy. You can sue us and spend thousands of dollars against our millions of dollars and hope that someday, maybe, we'll eventually pay you something."

Good luck with that.

To protect your assets as a real estate investor, you need to understand asset protection basics, then you need to come up with a custom asset protection plan. You need to understand land trusts and limited liability.

Setting Up And Properly Structuring LLCs: The Cost

Setting Up And Properly Structuring LLCs: The Cost

Setting up and properly structuring LLCs isn't cheap. I know this. However, they pay dividends in the long run. Okay, everybody sets up an asset holding company, because that's where you have a lot of your money tied up. The question becomes is, do I really need an operating company? Do I really need the shell corporation for me to do all of my business with? The answer, I believe, is yes. What a shell corporation does, this operating company, is it allows you to have a face to the world. To limit your personal liability from all of the business dealings that you do. This means real dollars, because a lawsuit against you, even if they can't collect against the assets, it goes against your credit score. And with a low credit, score it means that you are not able to obtain the financing and be able to operate your business and acquire property, do deals the way that you want to. Those are real dollars. If you're talking about less than $1,000 to protect your credit score, you're talking about pennies on the future dollars that a bad credit score will cost. My name is Scott Smith, I'm an asset protection attorney out of Austin, Texas. I'm a real estate investor, and I want to help you.

How to Start a Self-Directed IRA With an LLC

How to Start a Self-Directed IRA With an LLC

[00:07] People will tell you that your IRA is safe and their raw, your IRA is only safe from lawsuits against you and somebody's coming after your IRA. But your Iras invested in an asset class such as real estate where it can be sued. The IRA itself is exposed. Also your IRA is exposed in the sense that it can be disqualified if any of the transactions of the IRA are expert. So there's two things that we do. The first thing that we do is we can split up multiple IRA accounts. So that way if any one type of investment, uh, is disqualified or has some type of issue, um, that I, that the IRS would look at, well that limits your exposure because it's only that one account that we have to worry about. The second thing that you can do is set up a self directed IRA with an LLC. Read about the benefits of self directed IRA here.

[00:57] I like to do it with a series LLC, but that allows us to do is if you look at our videos regarding the series LLC structure, we can take each different asset belonging to the IRA and put it into its own series. So that way if there's an issue with acid a, it doesn't affect acid, B, c, d, et cetera. And this way, if you have one property that has a lawsuit against it, somebody that can't take your entire IRA amount, they could only take a very limited amount of that structure. So make sure that your IRA is properly structured with asset protection because it's not by default, the safest way to do it. My name is Scott Smith. I'm an asset protection attorney with real estate. I'm a real estate investor myself. I want to help.

[01:40] Yeah,

[01:46] we're not like a normal law firm. We believe in putting out only high value content that's going to help you directly. You can get it on our youtube channel. You can get it on our website, or you can listen to all the different podcasts that I do. I am constantly putting out information because I know that this is going to make me the most valuable person in your life. Go check it all out right here.

[02:07] Good.

How to Maintain the Records and Accounting of a Company

How to Maintain the Records and Accounting of a Company

Why file an LLC and manage your company that way if it's just going to get invalidated anyway? Can't a good litigation attorney just pierce an LLC? That advice is just wrong. It's not true. LLCs are incredibly hard to pierce if they are maintained correctly. The problem is that most people, your average Joe Plumber that's running their company, doesn't do the things that are necessary to maintain the adequate corporate structure. So what are the things that you need to keep in mind? The first thing you need to keep in mind is that you must maintain records and an accounting of your company. What is the money that's coming in? What is the money that's being spent? You need to run everything through a bank account for your company so it has the appearance of being a legitimate, separate entity from yourself. You cannot treat the money of the company as if it were your own piggy bank. This means that in the accounting of your company, if you ever need to take money out, you must keep an accounting of it as a dividend from the company. If you fail to do these steps, the corporation can get pierced. If the corporation is pierced, it provides no protection. However, if you were diligent in maintaining adequate records of the company, you will be protected. My name is Scott Smith. I'm an asset protection attorney out of Austin, Texas. I want to help protect you.

Single-Member Versus Multi-Member LLCs

Single-Member Versus Multi-Member LLCs

Multi member LLCs aren't always required. It depends on the state statute. See our article on Single Member Vs. Multi Member LLCs.

In Texas, for example, a single member LLC is fine. In Florida, on the other hand, you need more than one member and they can't be married.

What's important here to note, is that you could file a real estate LLC in Texas and use that LLC in any state that you would like. When the court reviews whether to uphold that LLC in the other state, they're going to look to see whether that LLC is properly formed in the state of Texas.

I recommend that you form your LLC in Texas or a similar state with strong asset protection laws so that way you're not stuck with getting caught on a technicality.

 

 

Why a Registered Agent Is Required For Every LLC

Why a Registered Agent Is Required For Every LLC

A registered agent is required for every LLC in every state that it does business. The only reason for the registered agent to even exist is because if someone wants to sue your LLC, and they're not able to get to a member or manager personally to be able to serve them. Then this allows them to serve the lawsuit onto the Secretary of State and be able to have a person that must receive service of process or the lawsuit. Typically, these services are able to be engaged for anywhere from between 40 and $75 per year online. And they're all fungible, meaning that they're all the same, no matter where you go. So I always recommend saying, what's the best deal that you an get, and be able to go with that. My name is Scott Smith, I'm an Asset Protection Attorney at Austin, Texas. I'm a real estate investor, and I wanna help you.

LLCs Can Protect You From Issues That Insurance Refuses To Acknowledge

LLCs Can Protect You From Issues That Insurance Refuses to Acknowledge

[00:08] The truth is is there's a lot of that information when it comes to real estate investing and how to protect your assets, whether it's Joe Lucky, the keyboard warrior from an internet form or your CPA or the worst case scenario, a general practitioner that thinks he has a clue about what it means to be a real estate investor. If they tell you that all you needed shirt is insurance, they are wrong and Sherman's protects you from different types of claims than an LLC does. Let's take for example a case that I had a client a, it wasn't a slip and fall on her front porch. It wasn't that a, you know, somebody had a simple case of negligence and the management of the property. Well those would be things that insurance would cover and hurricanes is that she remodeled the house and she replaced the plumbing underneath the house.

[01:02] The buyers asked her in an email, what plumbing underneath the house did you replace? And her response was all of the plumbing in the house had been replaced. Come to find out three months later after the sale that there was a leak. In the plumbing resulting in tens of thousands of dollars to damage because the buyers at that point, we're out of town. Well, what do you think happened? Well, a loss of habit because the buyers were saying that your email was intentionally fraudulent. When you told us that all of the plumbing in the house had been replaced. This isn't a case of a seller who was intentionally misleading a buyer. This is a case that happens with almost all losses. It's a misunderstanding. You don't have to be a bad person to get sued. All you have to have is a misunderstanding. Luckily for my client, Jen, a proper asset protection strategy in place with a series of little seat that allowed us to negotiate the very advantageous resolution to the case. In fact, that particular case, we were able to get completely drunk. My name is Scott Smith. I'm an asset protection attorney specializing in real estate company structures. I protect my clients and make them judgment and I'd like to help.

[02:32] If you thought this content was good, you have to go see the bigger pockets podcast that I did. It was the top 10 things every real estate investor has to know about asset protection, and you can go listen to it right here.

Quick Fix: 2018 IRA Contribution Limits

Hello, fellow investors. Every new year, I get many questions about IRA contribution limits and what changes have taken effect. This year, there have been many more questions than usual about this subject, as well as the new tax laws.  Don't worry, there's an article in the works about how these new tax laws will impact real estate investors soon. While it would be impossible to answer all of the questions I've received in this space, I will be giving an update on the IRA Contribution Limits for 2018.

Today, we're just going to talk about a "quick fix" for your IRA and retirement concerns. We'll also show you one big way to get around the 2018 limits and make the most of your retirement savings.  Even better, you can learn all of this information in less than ten minutes.
 

2018 IRA Contribution Limits

Let's start with the good news:  IRA contribution limits remain the same in 2018 as they did in 2017 (and even as far back as 2016). Here's the quick and dirty update:

But maybe you want to contribute more. If you're ready to take your retirement account to the next level, here is our Quick Fix solution:  take advantage of a self-directed IRA LLC.
 

Why Is a Self-Directed IRA LLC Good For Me?

Self-Directed IRA LLCs  are a mouthful to talk about, so it's possible you haven't even heard of this tool at all. But they will offer you the ability to make tax-free investments without custodian consent. Since you don't need to get permission from a custodian (you are, after all, an adult--or possibly an extremely bright teenager planning retirement early), you can make the investments you want, and you can make them faster than you would if you were stuck in Traditional IRA Land. Self-directed IRA LLCs are special purpose liability companies. Yours will be fully owned and managed by you. You can lord over it and feel like a God on the weekends. The LLC can become a pass-through for tax purposes, which allows you, the owner, to assume the tax burden instead of the LLC. This gives you tax options.
 
In most cases, income and gains flow back into the IRA tax-free. You are also able to keep and funds in an LLC bank account without having to go through a custodian. These accounts operate similarly to personal checking accounts, but the company is separate from you as an individual. You have control over, and access to your money, which means greater investment flexibility.
 
You can invest in anything from your IRA LLC. And when I say anything, I mean literally anything: real estate, gold, Bitcoin, and so much more is all fair game. Your only limit is your imagination. No matter where you put your money, your income and gains flow back into your fund tax-free. You can stick it to Uncle Sam--who among us hasn't wanted to? And even better, you can maximize your contributions and plan the retirement you've fantasized about for during your working life.


Quick and Dirty Recap of Self-Directed IRA LLC Benefits

 
So, to briefly review for the scanners in the audience, when you get a Self-Directed IRA LLC:


Pretty cool, right?

That's it for today. If you have any questions about Self-Directed IRA LLCs, want to sing their praises, or want to pick an argument with me because you think I'm totally off-base, you can do so in the comments below. Let's spread the Self-Directed IRA LLC Gospel and work towards a happy, healthy, and comfortable retirement plan together.
 
 
 

The Benefits of Series LLCs (Protection, Business Growth & More)

Real estate investing is an excellent way to put your money to work. The returns consistently outperform traditional savings and common investment vehicles, with little risk and low management.

There's only one problem. We live in the most litigious society on earth. Did you know one in four U.S. citizens will be sued in their lifetimes? Real estate investors face an even greater risk of lawsuit.

For years, the wealthy and powerful have shielded their wealth within layers of anonymous companies. Now you can do the same. The Series LLC is one of the central legal structures in any asset protection plan. Let's look at the benefits of using one.

A Traditional Limited Liability Company Isn't Enough To Protect Your Assets

Property in your name leaves you open to losing it all: Litigation doesn’t even have to have anything to do with your property in order to wipe you out. If you have property in your name, or even worse, in a general partnership, and are found liable in a car wreck or other random accident, you could lose everything. Insurance is not going to stop a plaintiff from going after anything and everything you own to repay damages for extensive hospital bills or a wrongful death action.

Property in a traditional LLC or corporation isn’t much better. You are in a little better shape if you have all your assets in one traditional LLC or corporation. In that case, lawsuits against you personally can’t normally touch your business assets. But if you have all your assets in one LLC, and there is a slip and fall at one of your properties that results in serious injury or death, a plaintiff can go after all your properties. It doesn’t matter that your other properties are unrelated to the incident.

Insurance Won't Protect Your Investments

Insurance can help with minor incidents, but it’s not going to save you from losing everything in the case of a big, catastrophic lawsuit. If someone falls through your stairs and the court finds you are at fault because of the nature of the structure or maintenance, your insurance will likely not cover you at all. And certainly, neither your property nor your automobile insurance will cover you if you are found negligent in a serious accident.

The one thing that can save you from disaster is setting up an LLC Series and Anonymous Trust. Plaintiffs can never reach all of your assets because they are owned by separate legal entities and never in your name.

How the Series LLC Structure Protects You

1. Compartmentalizes Your Risk

Setting up an LLC Series Structure legally isolates your equity into separate limited liability companies inside a holding company. Even if you lose a lawsuit, the damage is limited to a single property or asset within the individual series.

The Series LLC works for multiple types of investments. It's great for property management but is equally effective at protecting other investments like a stock portfolio.

2. Hides Your Assets

In a Series LLC, your assets are each separated into individual entities. You can add an anonymous trust to each of these entities for further protection.

Limited liability companies and other business entities are exposed to the public. Anybody can look up your company name and see what type of assets it contains. Trusts, on the other hand, do not need to list their holdings publicly. When combined with the Series LLC, it makes all of the individual holdings essentially invisible. The anonymous trusts own the LLC itself and serve as title trusts for the real estate asset.

How a Series LLC Protects You From Lawsuits

There are three pillars of any lawsuit: opportunity, incentive, and the judgement. Winning a judgement requires a good lawyer, a friendly judge or jury, and a little luck. Clearly, that isn't the pillar we want to focus on. Instead, asset protection strategies target opportunity and incentives.

1. Plaintiff Attorneys Can't Sue What Isn't There

An accident on your property plants the seed of opportunity, but it isn't enough to kick off a lawsuit. In order to put things in motion, the lawsuit attorney must be able to sue you.

An anonymous Series LLC can remove this opportunity in two ways.

Using a Shell Company: Did you know you can break your company into two separate companies? The first is an asset holding company, which isolates assets into individual entities. The second is an operations company, which manages the day-to-day affairs. With some minor adjustments to your contracts, you can require all lawsuits to be brought against the operations company. This acts as a shell company, which means even if you lose the lawsuit there is nothing of value to be lost.

Using Trusts: As mentioned previously, hiding your assets within trusts means your assets are invisible. Even if you could be sued, your opponent's legal team won't be able to find which company to bring the case against. This dramatically reduces the opportunity to bring a lawsuit against you, even if there was some event that could be used as justification for doing so.

2. Attorneys Won’t Gamble or Chase the Money

Not only does a series LLC structure legally protect your assets, because your equity is in multiple legal entities, but it also discourages most lawsuits from ever being filed. Attorneys will not take a case unless they know how they will get paid. If equity is held in multiple LLCs set up with anonymous trusts it will appear on a search that you own very little – if anything at all. Attorneys will look elsewhere for an easier payday.

Plaintiffs need to pay at least $5,000 to even start litigation, and the amount quickly escalates to over $10,000 once discovery starts. It simply does not make sense for a plaintiff to file a lawsuit when they cannot find any assets that can be seized if they win a damage award.

Series LLCs Let You Grow Your Business Forever

With the Series LLC structure, there's an operating company on top, and multiple companies beneath. We use the metaphor of "parent-child" relationships to make the point that this structure lets you have as many "kids," or Series, as you like.

Each Series is its own LLC, and you can create new ones easily as you acquire more investments or other assets. As a bonus, you save money by using a Series LLC rather than the same amount of Traditional LLCs. You pay the costs of establishing the LLC once, and only once.

Series LLCs Protect Your Valuable Assets

The Series LLC's structure isolates your assets, allowing you to have full liability protection for each one. Each asset is secured in its own Series, which functions as its own LLC.

In practice, using a Series LLC makes you very difficult, or at least highly impractical, to sue. Even if someone has a good reason and the resources to sue you, their attorney may not want to. Why? The reasons are pretty simple:

This is just the quick and dirty version. See our previous article on how the Series LLC prevents lawsuits to learn more.

Series LLCs Offer Great Tax Benefits

That's right, even Uncle Sam is kind to the Series LLC. We could write a whole article on tax benefits alone, but here are our top two.

1. Save on Business Taxes

The Series LLC is represented only in its "home state." This means, if your Series LLC is formed in a state with no sales tax, you get to skate on sales tax. For real estate investors, this means rental payments between Series aren't subject to sales tax.

The beautiful part is, you don't even have to reside in the state you form the Series LLC in. If you're itching to save on taxes, consider the Texas Series LLC. This entity will also help you save money via pass-through taxation.

2. Simplify Your Tax Returns

Even though you can have as many Series and assets as you want, you'll still only file one tax return for the whole shebang. The operating company, or parent company, is the only one that you're required to put on the form. Of course, you're still paying taxes on the "children" (Series), but it's all reported as a single entity.

Is There a Catch?

Setting up LLC protection for your real estate business is fast, cost-effective, and scalable. You can be fully protected inside of only a week! There is a one-time set-up of the series structure for the limited liability company. Then you simply purchase a title transfer for each property you want to move within the asset protection vehicle.

There is no more work for your accountant with a series LLC. Though there are separate legal entities, there is a holding company LLC which is owned by an anonymous trust. This means there is still just one tax return, one LLC filing, one EIN, and one operating agreement. After it is set up, you won’t even notice it’s there in your normal course of business.

Setting up the initial structure is inexpensive considering the massive protection you will get and its infinite scalability. You can sleep better knowing your real estate investments and passive income have full asset protection with an LLC series structure and anonymous trusts.

Delaware Statutory Trust Advantages: Protect Your Assets Like the Pros

The Delaware statutory trust (DST) is a tool wise real estate investors use to avoid the dreaded franchise tax that eats into the profits of LLCs. The California investor, in particular, enjoys advantages based on two concepts:

  1. Insulating the assets and keeping them separate from one another by using a shell company
  2. Masking the assets from any provable relationship between you personally or the shell company.

There are even more good reasons to use this structure. Delaware Statutory Trust advantages also include:

The beauty of this structure is all the effort is up front. Once it's in place, you'll barely even know it's there and you can go back to business as usual.

What is the Best Type of Company For Real Estate Investors in California?

As a real estate investor, you have several options for your company structure. But we've found the best for asset protection for the California investor is the Delaware statutory trust. Note: investors from any state can take advantage of this tool, but California state restrictions on business make it ideal for Golden State residents. 

A simple way to understand the DST is to compare it to a parent and its children. The DST itself plays the role of the mother and father, rolled into one.  Unlike human parents, Octomom notwithstanding, it can reproduce forever. In this case, the children are referred to as "Series." Despite the fact that the DST is its own legal entity with a single filing and tax return, each child receives the same protections as a traditional LLC. This includes, of course, liability protections. This image gives you an idea of how this works:

delaware statutory trust advantages

As you can see, each Series can contain one or more assets. Creating a new Series is simple and can be done in a matter of minutes. For a more detailed explanation, take a look at our piece on the Series LLC Structure. The same information applies to the DST. Its structure is similar to that of the Series LLC.

How Does the Delaware Statutory Trust Stop Lawsuits?

The DST stops lawsuits by sapping any motivation an attorney would have to file one at all. Further, it places a nice, clear boundary on how much a litigious person could collect from you in court.  What does this actually look like?

Well, when you use a DST structure, even if someone does sue you, they're only able to "go after" the relevant asset in the Series.

Let's say an angry tenant tries to sue you for a problem related to your rental condo in Series 1.  Even if he/she is successful, only the condo is on the line. Your other assets in Series 2, 3, and the Holding Company are safe—and so is anything you own personally.

Believe it or not, this is actually the worst-case scenario. A well-implemented DST will kill the suit before it's even filed. This comes back to the motivation issue mentioned above. Think about it: what motivation does anyone ever have to file a lawsuit?  You might think of things like indignant rage, pure spite, etc., but the only motivation that matters for attorneys is cash-money. Or valuable assets that can be converted into cash money.

Even if the person initiating the suit is madder than hell, few attorneys will play ball if they have nothing to gain from winning. Believe me, as an attorney, I have much more profitable ways to spend my time than chasing after someone who doesn't have much for me to recover in judgment.

This is why my asset protection strategies attack recovery. It's easy enough to win a judgment, but on its own, it's like getting a gold star from the court: nice ego boost, but ultimately worthless. If the gold star is just a sticker, it actually costs the attorney precious and expensive time to pursue you. The gold star is only good if it's backed by actual gold, meaning, a valuable asset to convert into the cash we all know and love.

Roll with me on this: would you spend time researching a project at YOUR job that you weren't sure you're getting paid for? Hell no! Attorneys are even more hawkish than the average professional in this regard. We aren't going to waste money investigating you, let alone waltzing into court to sue you, if it's going to cost us more than we could win. There are many, many more tasks that we can bill for and receive certain payment. Without representation, even the most vindictive plaintiff doesn't stand a snowball's chance in hell of winning the judgment.

How Does the Anonymous Trust Play Into An Asset Protection Plan?

Anonymous Trusts help you drive home the point that you aren't worth coming after. Their job is to disguise the ownership of the asset in the first place. These Anonymous Trusts will ultimately hold the assets.

Remember the research phase that comes before any lawsuit we discussed above? Find out how to form an Anonymous Trust and it will more than pull its weight in your asset protection plan. In the internet age, it's pretty easy to figure out who owns a piece of property. County Clerk records are public record, and list the owners of a given property. Anyone with an internet connection can search these.

Usually, these records will clearly show the name of the owner of the property.  But if you use this strategy, the trust's name will be listed instead. And you can name that trust whatever you want. So when anyone, including a potential opposing attorney, goes to research the property, they'll see it is owned by "The XYZ Can't Find Me Trust" rather than a person. Your name is kept out of the whole affair. And to file a lawsuit, the litigant needs a name.

Where Do I Come in if the DST is Holding My Assets?

Trusts, including the example  "XYZ Can't Find Me Trust" are made up of several  parts. This is the DST Structure:

Parent = Delaware Statutory Trust

Child = Individual Child Series of a Delaware Statutory Trust

Land Trust = Living Trust that holds title to the real estate

Ordinarily, the trustee and the beneficiary cannot be the same person. The use of the structure outlined above keeps you, the individual with a name, from being both. Instead, the legal structures you control stand in. So your interests are represented regardless. Even if the trust itself is scrutinized in court, the worst-case scenario is that the trust is "merged." When this happens, your assets just return to the original DST.

How Does Bookkeeping Work for My DST Structure?

Proper record-keeping and vigilance on your part is essential for preventing the DST from being compromised. In legalese, this is called "piercing."  When a court pierces the structure, it can dismantle. You don't want that, because it would allow the court to treat all of the Series as one, instead of separate.

The DST must abide by several legal requirements. These include a valid trust agreement, initial and current filing with Delaware, a Delaware Registered Agent, and keeping in line with laws and IRS regulations governing the structure.

Our firm takes care of the trust agreement and ensures your DST is complying with these requirements. But you have a part too. Your job is to maintain accurate and responsible records.

Record-keeping for the DST structure is simple, and you're most likely using a structure that works if you err on the side of traditional bookkeeping methods. The DST structure above will require you to stay on top of the books for each individual Series. Remember, the power here is in the fact that you are treating them as separate companies. This means separate bank accounts, as well as treating them as different in your bookkeeping software. Generally, this just means identifying any money flowing in or out as belonging to that particular Series in your accounting software.

How Do I Set Up My Delaware Statutory Trust?

We've got you covered. Royal Legal Solutions provides comprehensive Delaware Statutory Trust and Anonymous Land Trust services. As an attorney and investor myself, I founded Royal Legal Solutions to help investors like you. While I specialize in asset protection, my other practice areas include estate and retirement planning. Over the years, I've helped many clients set up DSTs and Anonymous Trusts to establish a solid foundation for their asset protection plans.

If you're ready to get started, take our Financial Freedom Quiz where upon completing it you will have to opportunity to book a consultation. Together, we can build your real estate empire into a judgment-proof fortress.

Series LLCs (SLLC) 101: A Primer

Whoever said, “If it sounds too good to be true, it probably is,” wasn’t familiar with a Series LLC business structure, or SLLC.

Real estate investors around the nation are benefiting from this organizational framework. For many investors, the primary appeal lies in simplicity, safety and flexibility. Any nominal drawbacks can be readily addressed, or even proved to be advantageous, with the professional guidance of an asset protection specialist such as Royal Legal Solutions.

Take a few minutes to read the following overview to enhance your business or investment strategies.

SLLC Definitions

Series: 

Another term could be, “child”, “project”, “subsidiary” or “company”.  Picture a honeycomb, as in a beehive, with one or an infinite number of independent “cells”.  For our purposes, the partitions between these “cells” aren’t made of wax, but of solid steel.  Properly constructed, one unit may or may not complement the overall functions of others.  Properly constructed, none rely on others in order to function.  Each is autonomous.

LLC:

Once “series” is affixed, another term could be, “parent”, “umbrella” or “the beehive”. Now the bees enjoy economy and efficiency, but the beekeepers and bears can only attack a single, isolated, “cell”, one at a time.  All the other “cells”, the entirety of the beehive, remain in tact.

The Delaware Model:   

Barely more than 20 years ago, the Delaware Legislature, lobbied by the mutual fund industry, developed the innovative means to reduce duplicate paperwork, transparency, and liability in matters of taxation or litigation.  Presently, at least 16 states, Puerto Rico and D.C. have adopted some form of this legislation.
NOTE: With very rare exceptions, anyone can register a business of any type with any Secretary of State.  Regardless of residency, whether your legislature has adopted the Delaware Model, a variation thereof or none of the above … establishment of, investment in, an SLLC can be available to anyone.

Origins of the Series LLC

There is a unique objective of an SLLC that can provide exceptional advantages compared to a traditional LLC or any other business structure.  As referenced above, back in 1996, Delaware created the vehicle by which a single entity can be managed independently as “one” or operated as an alliance of “many” at the same time.

Texas law is essentially a mirror-image of what many refer to as, “The Delaware Series LLC” … ‘same benefits and advantages, with no requirement for annual renewal fees or paperwork.

Even in states other than Delaware and Texas, there are the same two common denominators.  Existing in the best of both worlds, an SLLC is an LLC with internal departments and an unlimited number of LLC ‘s under one ownership.  There is no distinction as to whether any “member” (“owner”) is an individual, sole proprietor / DBA, corporation, non-profit, partnership, spouse or even human or external LLC.

Some Advantages of the Series LLC

Barring any violation of law, government regulations or public policy, an SLLC Operating Agreement enjoys “maximum flexibility” and “freedom of contract”.  Members have extraordinary latitude in making their own rules and terms.

There is no pre-determined tax rate or business category. In general, membership may be able to elect to file and pay as sole proprietors, partners, corporate shareholders, non-profits or have the SLLC be the taxpayer of record.  Specifically, of course, the entity must be created in a way that is fully compliant while optimally beneficial.  Tax liability of the whole is limited to individual members’ respective risk, gain, compensation or stake as defined by the Operating Agreement.  “Double taxation” (on the SLLC and the membership) is most often avoided.

Contingent upon the state’s “shield laws”, members are generally protected from liability for the acts or debts of the SLLC.  This protection is extended to membership enrollments as few as one.  In the realm of real estate and real estate investment, each property can be treated as separate entities.  One deal gone south, one “slip and fall” lawsuit, should have no impact on the profits of other projects or the members thereof.

The economy of a Series Limited Liability Company is not “limited” to lower tax liability, or the savings in administrative manpower and paperwork.  One filing fee paid to the Texas Secretary of State will put you in business, no matter how many bees or honeycombs there are or may be subsequently added to the hive.  Unlike other states or business entities, to include Delaware, there are no “renewal fees” … annually or at any other time in the state of Texas.

Caveats  

Presently, there are about 15,000 words, about 50 pages and over 600 subsections in the Texas state statutes which govern LLC’s and SLLC’s.  No one can quantify or apply all the associated rules and regulations now in place with federal, out-of-state and foreign agencies.  (e.g., Canada doesn’t even recognize such a legal entity, but Canadians can participate in U.S. SLLC’s.)

Yet consistently, after 2 decades, the innovative “Delaware Model” (Series LLC) appears to be immune to significant litigation or legal challenges.  With only 5% of the world’s population, the U.S. is home to 80% of the planet’s lawyers.  Regardless, we’re still trying to find many legal cases in which Texas, Delaware or any states’ similar laws have even been contested. The only thing better than winning a lawsuit is never having one filed.

Yes, the fundamentals are simple, safe and flexible.  No, they aren’t “idiot-proof”.  Then again, any reasonably smart business owner can avoid any pitfalls:

Series LLC Examples: When Things Go South Legally

There is no business model that provides complete immunity from market reversals, natural disasters, or changes in laws and regulations.  Stuff happens to everyone, in every business.

And when even the best-laid plans of talented and successful business people go awry, the polygamous marriage among companies, creditors, or customers often end up in court.  Unlike holy matrimony or other business models, Series LLCs can protect all parties in advance.

Most often, with the right lawyer as “Best Man” or “Maid of Honor” chaperoning the courtship, the headaches and heartache of divorce court can be avoided altogether.

When The Series LLC Saves The Day: Two Examples

The first comes from real life: the premier, if not only, case in which a federal bankruptcy court upheld the concept and validity of SLLCs and denied a creditor’s attempt to game the system in their favor.  The second is hypothetical, but has real-life implications. After all, “happily ever after fairy tale marriages” are exactly that: fairy tales.

Regardless, all levels of state, local and federal government (courts, legislatures, regulatory agencies, the I.R.S. itself) are interpreting and enforcing myth as reality.  Judges, politicians, and bureaucrats don’t like change. They love inertia, momentum and precedent–campaign speeches notwithstanding.

Example 1: In re Dominion Ventures, LLC, No. 11-12282 (Bankr. D. Del.)

Now, it’s impossible to get two lawyers together without getting lost in a gigantic bowl of word salad or a maze of rabbit holes.  Put them in a courtroom in front of a judge (who’s also a lawyer) and things actually get simpler.  The focus and facts are limited to a relevant Reader’s Digest version.  Legalese will be kept to minimum.

Dominion, a legitimate and reputable group of businessmen, established an SLLC in full compliance with state law.  Both the “parent” company and each of the “children” cells operated independently, maintained separate accounting, and did everything “by the book.” That included using sound business practices.  One thing led to another and Dominion needed some help on credit and cash flow.  “Creditor X” to the rescue!

All that was required was a change in the original Operating Agreement and absolute veto power over all operations and decision making.  Well, the bailout didn’t prevent the boat from sinking and ultimately everyone ended up in Bankruptcy Court.  Now remember, the issues had nothing to do with SLLC legislation. Things just didn’t work out.  “Creditor X” claimed that its after-the-fact position prevented SLLC protection and that all assets of all “children” should be consolidated to satisfy the debt.

Maybe “Creditor X” should have retained a lawyer who had the experience and expertise to advise against the unenforceable loan at the altar.  At the end of the day, the assets of Dominion, its members (owners), and all other respective creditors of the individual “parents” and “children” were protected.

Example 2: Moldy Mary vs. Larry Landlord, (S) LLC

Larry Landlord bought his first duplex just after his graduation from high school.  The property wasn’t much to look at, but it was cheap and he was handy with his hands.  Four years later, a complete repainting of the exterior, and a brand new roof had improved the curb appeal.  The kitchens were remodeled.  The flooring, plumbing, and paneling were upgraded.  Weeds and dirt had been replaced with immaculate landscaping.  Prospective tenants had to get in line on a waiting list.

So, he bought another rental property. And another.  And another. All under the protection, as independent series, of an SLLC.  Tenants clamored for a space in his well-maintained, well-managed rental properties.  As many investors were knocking on the door to participate in the next project.

Eventually, Larry had expanded operations to include 14 properties (and 14 segregated series), to include 5 apartment complexes and 10 members (owners).  Each was fully compliant with state law requirements for documentation, maintaining separate bank accounts, tax filings, and accounting.  Some participants were members of a dozen common projects.  Some had invested in only one.  According to sound business practice, common sense, and the exercise of due diligence, the group hired a a highly reputable building inspector. He gave the building a comprehensive evaluation for each unit.
A sixth property, a high-rise apartment complex costing as much as all other holdings combined, came onto the market and Buster Bankroll contacted Larry.  Knowing nothing about real estate or property management, Buster wanted to invest as an absentee landlord.  Negotiations went well.  Occupancy was at 94% after the first month.

Moldy Mary was one of Larry Landlord’s very first tenants.  She’d been living in the same apartment, owned by a different series, for about 8 years.  A few years previously, after a particularly heavy rainstorm, she’d noticed water spots on her walls and a peculiar smell in her bedroom. The next day, Larry Landlord’s maintenance crew arrived, replaced a section of roofing shingles as well as some interior sheet rock.

Fast forward to 6 months later. Mary got sick. Really sick. So did her husband and three kids. Medical bills exceeded insurance limits. Neither spouse could work and lost their jobs.  The entire family was forced to leave the apartment and move in with relatives.

But to prove a point, when the family contacted Louie Litigator, lawsuits were filed the same day. Multiple, massive lawsuits. Fortunately for Larry and Buster and all other members (including those who owned Mary’s series), the SLLC was on their side.

Based on every legal protections provided to the Delaware SLLC structure only one of the choices below are NOT true.  Let us know which you chose:

  1.  Larry Litigator did an hour’s worth of research and determined that liability lies with only the series that owns Mary’s apartment. He has withdrawn from the case and the “blood-from-a-turnip" strategy.
  2.  The members of the series who own Mary’s apartment have no exposure beyond their investment.
  3. The very specific language of statutes and growing legal precedent will not threaten the assets Buster or Larry or all other members of any and all other series (or Larry Landlords, (S)LLC).

Guess in the comments section below.

Learn More About the Series LLC

Learn more about the Series LLC here on the Royal Legal Solutions website. We've written extensively about the benefits of the Series LLC, and given much more information about how the Series LLC works. We offer many more educational materials on this subject because we believe all real estate investors have the right to be informed. If you're considering forming a Series LLC, contact us for your consultation today. We'll get the job done right, and keep your head above water if things go South!

Self-Directed IRA LLCs: The Best of all Worlds

The self-directed IRA LLC gives you one hundred percent control over how you invest. Most investors lack this ability.
It’s not the right move for everybody, but if you want to truly maximize the return on your investment, and you don’t mind going the extra mile to set up a company that handles your funds, there are some very sexy benefits.

1. Tax Benefits

You will get tax deferral and tax-free through your LLC along with the benefits of a traditional IRA. All income and gains generated by your IRA LLC will land in your IRA tax-free.
You’re IRA LLC will also grow tax-free. This is the tax equivalent of finding El Dorado. It is possible. You will pay tax on distributions, but all of your growth is tax-free.

2. Options for Diversification

If this doesn’t get you excited, you don’t have a pulse. With a self-directed IRA LLC you can invest in anything, including real estate and private business entities.
I know you kids love my man Randy. Randy, that sly old fox, invested in his own fishing business with his IRA LLC and got WINDFALL fishing up off the ground without giving the IRS a dime. That’s why he catches so many
fish. Randy is a whale.
You don’t need to grow your own business with your retirement’s funds of course. You’ll be making fat stacks of green with a solid portfolio in both bad times and good if you diversify.

3. Access to Your Own Account

You aren’t retiring and starting an IRA LLC to have a boss. With this option you will have direct access to your IRA funds. You can make an investment quickly and efficiently. No need for approvals. No need to pay a custodian. It’s just you baby, and you’re calling the shots.

4. Speed

The handmaiden of access. If you want to make an investment, all you need to do is write a check. You can transfer funds straight from your LLC bank account.

5. Lower Fees

No custodian means one less person to pay. There are also no account valuation fees.

6. Limited Liability

Any assets you hold outside of the LLC are protected from litigation against the LLC. This is important for real estate investors, as claims arising from defects in the design or construction improvements are subject to statutes of limitations.

7. Asset and Creditor Protection

You are covered for up to a million in bankruptcy protection. Markets do have massive fluctuations. It’s good to be backed up.
The Self-Directed IRA LLC is like an IRA on steroids. If you want to take back control of your finances, get yours in the game.
For assistance forming or investing with your Self-Directed IRA LLC, schedule your consultation today.