COVID-19 UPDATE from Bellas & Wachowski
Justia Lawyer Rating
Super Lawyers
The National Trial Lawyers
Illinois State Bar Association
The National Trial Lawyers Top 100
Fivestar Review Site
America's Top 100 Attorneys
Top Attorneys in Illinois

LLCs for Real Estate Investments

Real estate investment is often a time-honored approach to find financial independence and to grow your wealth. However, with incredible benefits comes risks and complexities as well. At Bellas & Wachowski, we believe that a one-size-fits-all structure doesn’t appeal to every real estate investor. It merely leaves them vulnerable to liabilities.

Any investor that plays the game long enough may be affected by legal disputes. The real estate investment lifecycle certainly involves agreements with several people. Unfortunately, a conflict may result in actions against you.

Therefore, holistic planning may be necessary, so your assets aren’t at stake in lawsuits. The preparation requires you to use a business structure such as an Limited Liability Company (“LLC”) designed with keeping in mind that real estate is at the core to meet particular needs. The experienced business lawyers of Bellas & Wachowski can explain to you the use of real estate investment LLC in detail.

What Is An LLC?

When the investors create a limited liability company, the firm turns into its very own legal entity. This means that the LLC can acquire an individual bank account, taxation ID, and conduct business under its name. In a true sense, the real estate investment LLC becomes liable for its own actions. It somewhat falls between a partnership and a corporation, and the advantages make it a popular choice.

Why Use Real Estate Investment LLC?

After you’ve determined a perfect piece of real estate that gives you future opportunities, it’s time to protect yourself from ownership risks. LLC is a winning combination that offers organizational efficacy, liability protection, and tax savings to a great extent, which may contrarily be unavailable to other entities. Holding the property through an LLC entity will ensure you have the needed flexibility. Primary advantages of using LLC include the following:

  • LLC company protects your assets from any lawsuits by trespassers, tenants, or guests.
  • It gives a flexible management structure for the members or managers to be elected.
  • Tax benefits of using LLC are available creating a flow-through tax treatment of all tax benefits.

Protection Against Liability

LLC’s offer immunity to the members if all of the legal obligations for establishing and maintaining the LLC are met. This personal immunity is a cornerstone to great asset protection. Without the protection of an LLC, owners face personal liability for the actions of the business and claims may be enforceable against the owner, and the owner’s home, rental property, and personal account may be at risk. In addition to obtaining the necessary business liability insurance, we strongly suggest maintaining liability protection and operate the LLC business under the proper legal formalities, which is why we offer the additional service of our annual Corporate Maintenance Plan.

Taxation Benefits

LLC taxes aren’t paid by the business directly – it files an informational return since it’s eligible for pass-through income taxation. We see companies making related mistakes day in and day out. Choosing a tax status that matches the LLC’s operating agreements is mandatory to gain necessary protection.

Taxation structure depends on your motivation, the state you live/ operate in, and the information you want to disclose to the government. Knowing this, you’ll have to be careful how you treat your entities from a federal tax point.

At Bellas & Wachowski, it’s our goal to keep clients from getting audited in asset protection planning. The person who audits may not even understand any specifics. You’ll have to appeal the decision anyway and invest a lot of money as well as time in proving you’re right. We ensure you don’t go through these hassles and remain at the lowest risk of the audit pool.

Member Managed or Manager Managed Ownership

Owners decide how their firm will be managed, which requires them to choose between two primary structures:

Member Managed: Members carry out daily operations and bind to different contracts.

Manager Managed: Managers may/ may not be members but are appointed by members and may bind the LLC to agreements.

Understanding this structure helps you get the best overall protection you can afford for your specific assets.

Seek Legal Guidance from Experienced Business Attorneys in forming an LLC

With a pool of information readily available online, it may still be a complicated process to protect all your properties and assets successfully. Meticulously understanding the use of LLC in the real estate investment business becomes crucial.

Bellas & Wachowski includes knowledgeable business and real estate attorneys who understand how each structure works to advise you on the best possible way out. We’ve been working with real estate clients to make sure their assets are protected. Our many years of industry experience makes us different from local attorneys and internet gurus. We’ve got a breadth of knowledge to help minimize your taxes while maximizing your asset protection, so it’s also compliant for real estate. Contact Attorney Misty Cygan directly 847-823-9034 or request a consultation through this online form for legal assistance.

You can also start the process right now by clicking on the links below and we can have you set up in an LLC within days.