RG 016 – Understanding the Benefits of Owning U.S. Real Estate in a Entity With Michael Callon
In case you missed it, here are some of the highlights from our conversation with Michael Callon
- Licensed to practice law in the state of California since 2005;
- Went to UCLA & Loyola Law School;
- He is well versed in all forms of entity structuring;
- Works solely with real estate companies to advise on the best entities to own U.S. real estate;
- Lives in Southern California;
Something Unrelated to Real Estate Investing:
- Produces house and techno music in his spare time!
- Has been DJ’ing for 13 years! Jace Mile
Nuts and Bolts:
Understanding the benefits of owning U.S. real estate in a business entity!
- What is entity structuring? It removes the liability from an individual and places it on the entity, aka the business;
- Two major benefits from owning real estate in a business entity: 1) Shielding your personal assets from liability, & 2) Tax benefits;
- Basic entity structures: Corporations (S-Corps, C-Corps), LLC – Limited Liability Company (most preferable way to own U.S. real estate);
- Documentation: Articles of Organization file with the state the property is owned; Statement of Information; Operating Agreement;
- Report who is the Registered Agent: This is just an address where the state can send legal paperwork;
- Some states will have a yearly filing fee; check with the state you start the LLC;
- Every other year you have to file another Statement of Information; State is checking in with the LLC.
- Safest from a liability point of view 1 property = 1 LLC
- LLC can be a member of another LLC
- Maintaining your LLC properly; Make sure the LLC has enough reserves to cover its own debts and business affairs;
- Make sure the LLC has a separate bank account to prove it is truly separate from you personally;
- Funding the LLC is stated in the Operating Agreement as a capital investment;
- Excess cashflow from the property/LLC; make sure you have wording in your Operating Agreement that states the frequencies of money leaving the LLC bank account.
- Can an international investor legally own/operate an entity from abroad: YES!
Top Investing Tips:
- Most successful habit? Plan and set achievable steps/goals
- Most influential tool in you RE business? Michael’s brain! Legal software LexisNexis
- What’s the most exciting project right now? Michael is starting his own legal firm! Forming a one-stop shop for real estate with his real estate agent fiancée!
Contact Michael if you are interested to learn more about U.S. entity structuring:
LinkedIn: Click here
Ph: +1 310 968 0649
Ready, Aim, Fire!