In an earlier post, I discussed the pitfalls of using a one-size-fits-all operating agreement, especially for real estate investing. What about when an LLC has no operating agreement at all? This is a common scenario when someone files the articles of organization with their state’s secretary of state and declares the job well done. Usually, it’s […]
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LLC Timebombs: Have you read your Operating Agreement lately?
Potential clients often ask me, “why do I need a lawyer if an LLC is so easy to form?” Sure, it doesn’t take much effort to log on to the Secretary of State’s website, but there is much more to LLC formation than just putting your name into a form and paying $125. An LLC […]
Continue ReadingDon’t Be Deceptive– Avoid Using These Scammy Mailers
Beware of Scammy Mailers Over the few years I’ve been active on the website BiggerPockets, I’ve seen a few commercial printers pushing their top-of-the-line products for direct mail — official-looking envelopes that look like they’re being sent from the government. It’s important to be wary of these scammy mailers and avoid falling for their deceptive tactics. […]
Continue ReadingKeep it legal, wholesalers: Deceptive Practices & Ohio Law
The debate about the legality of wholesaling burns brightly on BiggerPockets and the rest of the Internet. I’ve said my peace on the matter before, so today I want to talk about something different: deceptive practices. Wholesalers often find themselves stretching the truth to close the deal, whether it’s misrepresenting that you’re the end buyer, or even […]
Continue ReadingShould You Use a Series LLC? Exploring the Pros and Cons
The series LLC is a novel limited liability entity that promises to solve many problems of the real estate investor. This article is meant to highlight some of the pros and cons of using a series LLC in your real estate investment. The Pros The traditional asset protection advice that gets repeated all the time […]
Continue ReadingThomas v. Fletcher: Becoming Your Corporation’s Landlord
Feuding Shareholders: Thomas v. Fletcher Thomas v. Fletcher, a 2006 case out of the Ohio 3rd District Court of Appeals, is a sordid tale of three feuding corporate shareholders, and one man’s struggle to gain the upper hand against two brothers aligned against him. The case briefly touches on the conflict of interest presented by […]
Continue ReadingOwner Finance: Prepayment Penalties Under $75,000 Illegal
Investors selling property with owner finance should be aware that they’re subject to Ohio’s Consumer Sales Practices Act. This law specifically covers individuals or entities that issue residential mortgages or loans to consumers, and would squarely include investors selling property subject to a private mortgage for the purpose of owner finance. Prepayment penalties are controlled […]
Continue ReadingWhy a Single-Member LLC Needs an Operating Agreement
How easy is it to form a single-member LLC? Most investors log onto their Secretary of State’s website, pay their fee and file the state form to create their LLC, and think they’re done. Unfortunately, that’s not the whole story. A limited liability company needs to have rules about operating itself, what happens when it’s dissolved, […]
Continue ReadingMcConnell v. Hunt Sports Enterprises: How the Columbus Blue Jackets shaped LLC law
Back in 1996, the NHL approached the mayor of Columbus about starting an expansion franchise in that city. The subsequent dealings among the partners of the enterprise ignited a legal controversy that eventually led to the award of $920,000 in legal fees, and set a precedent for modifications to fiduciary duty in LLC operating agreements. […]
Continue ReadingFive things your Ohio LLC operating agreement can NEVER do
And how you can get around it. The Ohio law governing limited liability companies generally allows the operating agreement to determine how the LLC is operated. The operating agreement governs the relationship between members, the behavior of managers, and how the members get paid. There are a few exceptions to this broad law that might […]
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