LLC Wyoming vs Delaware vs NV ๐Ÿ‘‰(AVOID THIS!!)๐Ÿ‘ˆ

– Hi, Clint Coons here and in this video I’m going to discuss when you should never use a Nevada,
Wyoming, or Delaware LLC to hold your renter real estate. Okay, let’s get started. (upbeat music) All right so, you’ve
heard about the benefits of Nevada, Wyoming, and Delaware. I mean, you can’t miss it. If you’ve been out
there doing any research on the internet there’s
a lot of information about these jurisdictions. And a lot of it is correct,
there’s no doubt about it. Nevada, Wyoming, Delaware, they offer excellent asset protection. They even offer anonymity
for you, as well, if you know how to take advantage of it so that people don’t know that you own that LLC that you’ve set up. However, for real estate investors many of these companies
that promote these types of jurisdictions also don’t
tell you the full story. When it comes to investing in real estate, if you’re gonna own property directly in the name of a limited liability company and not use a land trust,
be sure to check out some of my other videos on land trusts and the benefits of using
them in your investing, but if you’re going to own the
property directly in the LLC then the number one
mistake you’re gonna make, if that property does not exist in Nevada, Wyoming, or Delaware, is using one of those
LLCs to own that property. I’ll give you an example
of what’ll actually happen. So, there’s a company out of Las Vegas. It has three initials in its name. I’m not gonna mention it. And they set up structures for people, and I’ve picked up quite a few clients that have come to me with this problem. They’re set up with a
Nevada LLC right here. So this company sets up Nevada LLCs. They’re basically an entity mill. It’s a one-size-fits-all approach, and you know I talk about that a lot that real estate investing is not a one-size-fits-all approach. You really have to
understand the motivations of the client and what
they’re trying to accomplish. So, they set up this Nevada LLC for this individual investor to own property that’s located over here, this rental property in Illinois, right? Now, why did they do this? Well, Nevada offers great
charging order protection, so if you get sued they
can’t take the LLC from you. 100% accurate information. Nevada offers anonymity,
so if somebody looks they don’t see you, if you
use a nominee, that is. 100% accurate information. Nevada, no taxes. 100% accurate information,
if you live in Nevada. So, they tell you a number of benefits of using this Nevada
limited liability company to own your real estate. Low and behold, you do it. And just like anything, it works just fine until something happens. Now, what’s happened in this particular individual’s situation is that his tenant quit paying rent. Well, if my tenants quit paying
me rent, first thing I do is move for an unlawful detainer
action to kick them out. Well, he tried to move for
an unlawful detainer action to remove that tenant from
the property and he lost. Yeah, the court allowed
the tenant to remain in the property not paying him rent. I mean, talk about
adding salt to the wound! Well, why was that? Well, because the court
accurately applied the law, which states that this LLC, Nevada LLC, was doing business in Illinois and it wasn’t registered
to do business there. And by not being registered
to do business there then you can not
prosecute an action there, meaning bringing a law suit
to kick out your tenant. So, the case was dismissed. So, here’s an individual
real estate investor has a tenant now living
in the property rent-free, because he set up an LLC
that wasn’t registered in the state where the
property was located. Now, he said, “What can I do?”. Well, obviously there’s two
ways to handle this situation. Number one is you’re gonna foreign file your Nevada LLC, foreign
file it in Illinois. So, now it’s gonna be registered in Nevada and it’ll be registered in Illinois. The only problem with that is, you know, if you know the filing fees,
Illinois is about $700, and Nevada over here is now $350. So, now you’re up to $1000 a year for this structure to
get his thing set up. So, there’s no compelling reason to have a Nevada LLC
foreign filed in Illinois because at the end of the day, remember those benefits
we were talking about? Charging order protections, anonymity, taxation, and everything else
that goes with a Nevada LLC. Well, as soon as you register
it in Illinois, gone. You lose all of that. So, now you’re paying for a Nevada LLC that’s providing you zero
benefit under Nevada laws because it’s now been
registered in Illinois. And so that is the biggest
scam I see out there from these entity mills
that set up structures. They’re not attorney involved,
they’re just salesmen. Maybe they have one
pseudo-attorney on staff, they oftentimes say, that
they create for people that they end up running into problems. So, do not set up this type of structure. If you want the benefits of
that, do not make the mistake of trying to own property out of state. If the property was owned in Nevada, obviously we would go with a Nevada limited liability company. To get the benefits, the way we do it as you’ve watched from my other videos, create an Illinois LLC right here. Better yet, because it’s in Illinois, maybe use a series LLC. Watch my video on series
limited liability companies. Exceptional tool, especially
in Illinois, works great. And then have that
limited liability company owned down here by a
Wyoming LLC to pick up the anonymity, the
charging order protections. The things that you were
trying to accomplish here, but it wasn’t working out. So, when you’re going about there and putting together your
real estate structures, make sure that you’re creating the LLC in the state where the
property is located, unless of course, you’re
using a land trust, and then you can do it a different way, and I have plenty of
videos on that, as well. Don’t fall into that trap. Don’t let the slick
salesman on the other end of that phone line convince
you to do something that is not in your best interests. This is never, real estate investing is never a one-size-fits-all approach. (upbeat music)

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