You know you need to form an LLC to minimize your risk and protect your personal assets when investing in real estate. But did you know that you don't actually need to hire an attorney to do so?
For the record, I have nothing against lawyers. I'm married to one, and I myself obtained my JD. But with that said, there are times when attorneys are overused — and the money spent on those retainer fees and hourly rates could be better served toward mortgage payments, property maintenance and improvement projects.
By working with a legal document filing service, you can represent yourself to create an LLC for your property. In the eyes of the law and IRS, your business structure will be just as valid than if a high-priced attorney sent in the documents for you.
Of course, there's a key difference that's important to understand. A document filing service is exactly that… a document filing service. It's not a substitute for an attorney, accountant or tax advisor. These service companies are prohibited from giving you specific legal or financial advice for your set of circumstances. If you have particularly complex business needs, you should retain your own expert counsel to help get you started.
However, in straightforward circumstances, most investors can make a sound decision about their legal setup. And believe it or not, when you call some document filing services, it's possible to actually reach a live, knowledgeable person who's well versed in the needs of a small business and doesn't follow a script.
Of course, when it comes to legal matters, I'll be the first to say that trying to save a few dollars up front can end up costing you big in the long run. Trust your gut; if you feel like you need to bring in expert counsel, then by all means do so. Just remember that you are able to file for LLC formation or incorporation without an attorney, and this could be a reasonable, and cost effective, way to go.