Owning Investment Real Property in Your Series LLC
Greg Herman-Kiddens at the North Carolina Estate Planning Blog has a good reminder article about using a limited liability company to own your investment real estate. A limited liability company, as the name implies, gives you the capability to limit your liability exposure if you have any investment properties. Insurance is the first level of protection, but there can be exceptions and limitations to insurance coverage. That's where a LLC can come into play for the extra layer of protection. If there is a gap in insurance coverage, individually-owned property exposes the owner and the owner's assets to liability. However, placing that property in an LLC and only the LLC's asset are exposed. But what if you have several investment properties?
Iowa is currently one of a few (7) states that permit series LLC's. Basically, a series LLC allows the owner to have multiple properties/business ventures under one company structure, but treated as separate entities for tax purposes and liability purposes. In fact, Marc Ward believes that there may be an argument that a series LLC could provide even better protection than a separate LLC.
I am a California resident interested in buying investment property in Iowa. I am familiar with how title is held and transfered in CA, but would like to know more about the process in Iowa. Can you be of any assistance? Is there an escrow company or do attorney's handle the transaction like in some other states? How about title? If there is a website you can direct me to or literature I can review I would greatly appreciate it. Thank you.
David-
Good idea for another blog post. Iowa is unique in that it is an abstract state. Attorneys review the abstract and issue a title opinion. Attorneys will also handle closings for purchasers as well. There are a few escrow companies that will handle closings as well.