HEATHER EWING: The CRE RUNdown

Ep. 33 Tzvi Weiser - Busting LLC myths and Mastering LLC Management

• Heather Ewing, CCIM • Season 1 • Episode 33

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What will the future of LLCs in real estate look like? We dive deep into this intriguing question with Tzvi Weiser, a self-proclaimed LLC guru. Tzvi takes us through his fascinating career journey from law to real estate, investment banking, hedge funds, software, and international marketing, leading up to his current expertise in LLCs. We explore the evolving landscape of LLCs, particularly the impact of the Corporate Transparency Act, and how new regulations are shaping transparency and complexity. Plus, as states like New York adopt similar measures, we get insight into what this means for LLC owners everywhere.

We also take a moment to demystify LLC management, busting common myths about its complexity. With Tzvi’s guidance, managing an LLC can be straightforward if you follow some simple rules. Ever heard of a desert sport involving medieval weapons? We touch on this unique and profitable activity, relating it back to stress management strategies in LLCs. We also discuss how AI is revolutionizing legal documentation and LLC management, and the importance of professional services for both newbies and seasoned pros. This episode is packed with practical advice and engaging stories to keep you hooked!

Heather Ewing, CCIM:

Thank you for joining us on Heather Ewing, the CRE Rundown Today. I have a terrific guest for you. It's V Weiser, and he is none other than the LLC guru V welcome.

Tzvi Weiser:

Thank you, it's nice to be here in Madison Wisconsin.

Tzvi Weiser:

Yes or at least virtually.

Heather Ewing, CCIM:

Welcome from beautiful New York.

Tzvi Weiser:

Thank you.

Heather Ewing, CCIM:

So go ahead, share with our guests a little bit more about you, so they can get to know you?

Tzvi Weiser:

Sure, I'm actually pretty new to real estate. I've been doing real estate for the past four years. I started out I was a lawyer. I have an MBA, but it didn't take me long after I had my first law class to know that law was not going to be for me. I ended up doing investment banking in the summers rather than law. Then I decided to get an MBA At that point. When I graduated, I worked for a hedge fund. Then I actually ran a software company for a couple of years. That was very exciting. Then I got into international marketing with infomercials. So I did that for about a decade. Then I took a little break and when I came back looking around, I was a lot smarter than when I had started the first time around and I said real estate looks interesting, let's get involved in that. And I ended up doing 1031 exchanges for a couple of years. And then I was recruited to grow the LLC division of a big title company.

Heather Ewing, CCIM:

That's terrific and I think this orchestrates perfectly that typically, our paths are winding right. You have one experience which leads you to another and another, and then, within commercial real estate, it's really finding the arena that really speaks to you, and I would say you have definitely found your niche with the LLCs, because while we connected on LinkedIn what was it about a year ago or so? And your content is always amazing content, and also you present it in such a fun and informative way. It could be very dry and boring, so I want to congratulate you on that.

Tzvi Weiser:

Thank you. Thank you, I'm glad you enjoy. I'm glad that it gets across.

Heather Ewing, CCIM:

Definitely so. Where do you see LLCs going in the future? You know, the next future few years. What do you, what do you see happening on that path?

Tzvi Weiser:

Wow, that's a good question. If you tell me I had a loaded question, you probably didn't mean this one, but this is a probably pretty loaded question. Okay, so there's been an earthquake in the LLC arena, I would say, over the past year with the Corporate Transparency Act, and really it doesn't affect that much with regard to LLCs, because LLCs are state filings and the states don't really care about security. States care about money and that's why each state has their own strategy with LLCs how much they charge, what the rules are, and they're slightly different, but they make big differences. So a state like Wyoming will make it very easy to form an LLC over there, because their whole LLC strategy is simply to collect LLC money, whereas New York has lots of businesses. They don't care about your LLCs. You have to form the LLCs over there. They don't have to make it easy for you, so what they'll do is they'll kill you on taxes. They don't make it easy regarding anonymity. They don't make it easy with any of the things that are beneficial for LLCs, simply because they have a captive audience. People want to be in New York, they want to do business in New York. They can do what they want. That being said, we know that there are lots of structures and strategies to play one state off the other when you layer your LLC portfolio with holding companies and sister companies and all kinds of things to take advantage of every state along the way. It will cost you a couple of extra dollars forming more LLCs, but at the end of the day, you can get the desired result that you'd like from your LLC, from your LLC.

Tzvi Weiser:

Now all this leaves the federal government in a bind, because LLCs have become a haven for hiding drug money and terrorist money and all kinds of illicit activity. So what the federal government did was they said states, they control LLCs, they control commerce, but we control security. So we're going to create a law within the LLC realm which affects only security, which means that anybody who forms an LLC in any state has to report to the federal government who the owners are and who the decision makers in that LLC are. So it's called corporate transparency and people get very nervous because when they talk about LLCs they like to talk about anonymity, not transparency. But it's not really an issue because this is all locked away in a federal database, so this doesn't affect anybody who wants to sue me. They don't have access to this information, the government knows who it is. In case there is some terrorist activity that they suspect, they can go to the database and look for people's names in their database. So that really, on the surface of it, the Corporate Transparency Act didn't change anything with the LLCs.

Tzvi Weiser:

But here's where it gets tricky. The states thought, gee, that's a pretty good idea, we like this corporate transparency stuff and they can do whatever they want because they make the rules. So, not surprisingly, new York is the first state to enact a New York Transparency Act, which means that now they get all the information on the owners and the decision makers in the LLC and it's which parts are public information and which are not. I think they're still arguing about that. I'm not sure if that's already set in stone, but this act is underway and the way it works with states one state does it, the next state says, hmm, that's a pretty good idea. So this whole wave of transparency act is rolling across the states. I think probably California. I mean you could guess who the next couple of suspects will be. Who will enact this?

Tzvi Weiser:

kind of act and it's definitely, you know, in a lot of legislatures talking about it at this point. So, therefore, llcs will become trickier because there will be transparency, a lot more transparency going forward with LLCs in the next few years.

Heather Ewing, CCIM:

That is interesting. It's one of those you know. For me, it's like prior to learning about the wealth of knowledge that you have in this arena on LinkedIn is you know? It's like you start a business. It's an LLC, maybe it's incorporated, things like that. What's an ideal client for you, like? Who can you best help with all of this experience?

Tzvi Weiser:

this experience. So we have the clients that make us the most money and the clients that we get to help the most, and I enjoy both of them equally the same. When you talk about somebody starting out in business, then they need a lot of guidance and handholding and we help them, we advise them. Of course, we claim not to advise anybody. You got to speak to your CPA or your lawyer, but we sort of prep them and really give them an education so they can have an intelligent conversation with their lawyer or CPA or they can take our advice. But we didn't give it.

Tzvi Weiser:

That's not our core business. We don't charge for that. That's free service, so we certainly are not going to be liable for that. So that's a lot of fun. And it's a lot of fun watching our clients grow from the first time that they were clueless about LLCs to having five, 10, 15 LLCs. That gives us our greatest pleasure. And then obviously there are moneymakers, the guys. Who's the people who we have 300 of their LLC portfolios and that's obviously the bulk of our business right there definitely, definitely.

Heather Ewing, CCIM:

I always say it's the bigger deals, or, in your scenario, the the larger companies that, yeah, you with those. It allows you to do the the smaller ones here and there too, to help them out. And, if you think about it, just having that knowledge really puts them ahead in so many areas and I think for so many people starting a business, they don't think about the guidance, right? It's like the old saying of you don't know what you don't know, and I think it's yet another really important reason to fully utilize LinkedIn and connect with all of the different you know and connect with all of the different related arenas to commercial real estate, because you really need all the different associated groups and it's going to help you grow and also reduce your liability, which is key, as we know.

Tzvi Weiser:

Right? Well, I'll tell you a little secret. Our clients that have 500 LLCs in their portfolio. They know probably less than the guy starting out LLCs in their portfolio. They know probably less than the guy starting out because nobody knows about LLCs, nobody cares about LLCs. Talk to my lawyer. He deals with that. I just deal with underwriting and deal closing. Llcs is not for me. It's the poor brother in the whole circle of what goes on in real estate.

Heather Ewing, CCIM:

But you hit on. A really important point is that everyone has their niche and that's where, in creating your pivotal partners and having those referrals to CPAs and other groups is really instrumental, because we all work together as a large team, and what I like to say is that you handpick those people because, even though it's not your business, when you or I refer someone out, it's our name tied to that and that's something we handle with a lot of care and respect, because that's who we are and what we are.

Tzvi Weiser:

Yeah, I mean absolutely. That's why I love LinkedIn, because I've learned so much about real estate, about all the niches and everybody sharing their tidbits of knowledge. It's a great place.

Heather Ewing, CCIM:

Definitely so with LLCs, and this is something I always ask people because I am a firm believer in mindset how do you see that coming into play in working with people and starting their entities and the various aspects of that?

Tzvi Weiser:

It's hard to believe, but a lot of people I don't want to say the majority, but many people form LLCs, so their lawyer will form, their attorney will form their LLC and they'll think, yeah, my attorney takes care of my LLC. The attorney cares about one thing and one thing only that he's got an LLC name to put in all the documents so he can close the deal. What the attorney doesn't always tell the client is that there are things that you need to do to keep up your LLC. You need to have a registered agent, you need to have annual reports. And the client thinks, yeah, my lawyer's got my back, but the lawyer does not have anybody's back.

Tzvi Weiser:

The lawyer did his thing. The lawyer formed the llc and you're on your own. He may have referred it out to a registered agent for the first year, so it could be some company you never heard of and you don't know that they're even, that that registered agent even exists. And then, a year later, you'll get a bill from the legend, from the registered agent, saying you owe us 150 bucks for the year for a registered agent service. And they're like why know this guy?

Tzvi Weiser:

and like you know, next, and then you'll get some letter from the state and they'll say you owe us 89 bucks and it'll have some address of uh, your registered agent, or something, and you'll say, hey, I never parked my car there, I don't have any parking ticket there. Next, and so on and so forth, and then five years later you'll try to sell your uh your, or you'll try to refinance and they'll ask you for your articles from corporation that you don't even know that there's such a thing exists. So you'll call up your attorney that he may be able to retrieve for you and they'll say but this llc hasn't been in good standing in five years or, you know, it's been dissolved by the state three years ago. That's when the trouble starts. So people need to understand that there are rules to an LLC.

Tzvi Weiser:

An LLC protects you. If you are not in good standing, you cannot access the court system. So if your LLC is not in good standing and you need to sue somebody, you can't sue them. The court will not accept your case and that person will just get away with robbing you or whatever that person did to you. So it's a lot more important than people think to stay in good standing and take care of their LLCs and to understand what that means.

Heather Ewing, CCIM:

Definitely, which makes complete sense. Along those lines, what would you say? Are some of kind of like the myths?

Tzvi Weiser:

of LLCs. The myths I don't think anybody has any myths, because they don't, they doesn't exist, I think.

Heather Ewing, CCIM:

I think the LLC itself is the myth, you know I just got to have an LLC, then that's it.

Tzvi Weiser:

You know, it's like some monster in the ocean. He's there, we're sure he's there. We don't know what he does, but he's there, he's good. We're good because we have the LLC.

Heather Ewing, CCIM:

That's perfect, and this is completely off track now, but I love seeing some of your videos and your pictures of tell everyone about your desert sport. This is a unique one and I love this.

Tzvi Weiser:

So we have medieval weapons or ancient weapons, whatever you want to call it, and we take kids out to the desert and we'll do bow and arrow, swords, knife throwing, I mean everything every kid ever dreamed about. You know, I was always thinking it would probably be very profitable if I sold weapons over there, because nobody goes away without telling their parents we need to get this for our backyard. You know, there's always some weapon they need to take home with them. So that's a lot of fun.

Heather Ewing, CCIM:

How did you get into?

Tzvi Weiser:

that? Oh, that's a lot of fun. How did you get into that? Oh, that's a long story. That's like a full feature podcast, like two and a half hours.

Heather Ewing, CCIM:

That one will be continued. Well, people can follow the intrigue on your LinkedIn. But so with LLCs and all these other things, I mean it's got to be stressful, right? Especially when you're working with the big groups and hundreds of entities and things like that. How do you de-stress?

Tzvi Weiser:

take the stress out of it and we're pretty cool. We're not stressed because we know what we're doing. We just do it by the book. It's something really. I always say that I didn't like the law because I thought if everybody was just straight we wouldn't need lawyers, and if taxes was very simple we wouldn't need CPAs and if everybody would just do things right we wouldn't need LLC. Guys, you just have to abide by the rules, pay a couple of bills a month, fill out a couple of forms and you're good. But the enigma to me is why people just can't do it and it will never change. It will always be like that. I'm not worried about my job going out the window because I'll give away too much information and explain to people. It's simple. They'll never get it, so it will always be around.

Heather Ewing, CCIM:

Knowing and doing are two very different things, right?

Tzvi Weiser:

yeah, yeah there's. There's like an allergic reaction that most people have to llcs, for whatever reason um right I don't know it's, that's just the way it is I like with running right it's, oh no.

Heather Ewing, CCIM:

But, what about AI right? How do you see that influencing the arena?

Tzvi Weiser:

LLCs. I don't think there'll be that much of an influence because it's so simple. You know you talk about. I think big lawyers are in trouble because AI will start generating documents, but like we don't need AI. If AI, we could have gotten rid of LLCs a long time ago. We didn't need AI for that. A simple webpage can take care of LLCs for you if you want. All the states allow you to do all this stuff online without paying a service, but nobody manages. So AI is not going to change any of that. There are a lot of it. We work with operating agreements. I think AI can change that. I love AI. I'm the biggest fan. When my daughter showed me AI a year ago, it was right. As I was leaving my 1031 job to join the other firm to do LLCs, I was sitting on the couch writing a letter to my boss telling him how I and my daughter showed me AI.

Tzvi Weiser:

I said wow, this is amazing. I said please write me a letter resigning. They wrote me this beautiful letter. I was like wow, printed it out and brought it straight to my boss.

Heather Ewing, CCIM:

I love it, but one of the you know, one of the things I love about the service that you offer, too, is people are busy, they don't want to deal with things, and especially when they don't want to miss one of the details and have the liability and all of that. So I think it's such a great service that applies to so many people that it's a no brainer to be able to reach out to you, ask the questions. Have you work your magic with that and bring them?

Tzvi Weiser:

their entities.

Tzvi Weiser:

So it that that is cut and dry, which is nice but um, yeah, I mean I would say it's like twofold out service, like you said, to the beginners it's teaching them the ropes and explaining them what to do like. They'll always ask should I buy the property first or should I form the llc first? They'll ask can I form an llc in wyoming when I'm buying a property in Arkansas? All the basic questions. Those are the myths actually of LLC that they'll ask us all the time.

Tzvi Weiser:

So it's hand-holding, but really they can handle the LLCs by themselves if they wanted to, but they won't do it because they're beginners and we add so much value to them that it's worth working with us and paying a couple of dollars. You know they pay only for a simple processing fee when they get, you know, a lot of value in terms of consulting. And then there's the big people that have a lot of LLCs and they should pay a lot for our service in sort of untangling the mess that they've made with their LLCs. So you know, everybody gets something from working with us LLCs. So you know, everybody gets something from working with us.

Heather Ewing, CCIM:

Exactly, and it's always easier to start early, but there's never a bad time right To get the help, definitely. So, as we bring this in for a landing, I have one final question for you. This is the big one, and it's what does living fully mean to?

Tzvi Weiser:

you.

Heather Ewing, CCIM:

It's what does living fully mean to you.

Tzvi Weiser:

Leveling fully to me means that every second of life is really it counts. It means something, whether it's earning a living and you know you got to. You want to be intentional about what you're doing. Like you go to work, you process something and say, wow, that's another 10 bucks for my kid's tuition fund or whatever it is, and but you want to have it. Living fully means beyond. That is, not only am I making money when I'm working, but I'm actually doing something valuable or service to the other side. So it's sort of win-win. I'm doing something valuable, I'm bringing home something for myself, and that's in the work part. Obviously, outside of work everybody lives fully. Right, we all live fully. But even really sitting at your desk, living fully means not just going through the grind of going to work and plotting away, it's really living your job fully. And when you can live your job fully and get a lot of satisfaction out of that, that's the greatest.

Heather Ewing, CCIM:

I love that. That's perfect. Last but not least, how can people connect?

Tzvi Weiser:

with you. Well, linkedin is a great place because I hang out there a lot, but they can actually email me. They can call me. You know, my email is T-W-E-I-S-E-R at NUCOfilingscom, our new rebranded company name, n-u-c-o Filings. And yeah, I'm around. It doesn't take long to Google me and find me and they can reach out to me. It's no problem. It's what I do. Most of my day I spend talking to people on the phone, conversing with them by email. That's what my day looks like.

Heather Ewing, CCIM:

Excellent. Well, Steve, thank you so much for joining me today. It was a pleasure having you on and I look forward to continuing to learn more about LLCs online.

Tzvi Weiser:

Thank you for having me. It's great. I love that we talk every day, right.

Heather Ewing, CCIM:

It's the first time we met, but we talk, every day we talk twice a day once on your post and once on my post. Right. That's why I'm learning a lot and it's easy. Go to Zvi for help Makes it easy.

Tzvi Weiser:

That's why I feel like I can get. I can become an honorary citizen of Madison.

Heather Ewing, CCIM:

Right, exactly. We'll get you out here one day.

Tzvi Weiser:

Thank you, thank you for having me, thank you very much.