LLC?

Question

Hi All,
Is it better to start an LLC to begin investing or can one simply get business cards and go from there?

Robin Vidovich · Answer

My understanding is that an LLC forms another layer of protection for your personal assets. If you do buy a property without LLC protection as stated in an eatlier post, make sure that you buy additional insurance for the property.

Account Closed · Answer

I will leave the LLC aspect of the question for MikeOH to address.

A license is a very local matter. Your city is normally the one who sets licensing standards.

At the state level there are restrictions on being a property manager for a property you do not own. Other than that there are normally no state level licenses. Just regulations to follow.

Check online with you local city, county and state. Consider joining the local apartment owners association for your state as they will generally be on top of all the rules, reg's and license issues that will apply.

John Corey

Natalie Kolodij · Answer

Account Closed

Are they paying you to advertise them?

Pulling back up posts from a decade ago to share this is pretty bad. There are TONS of posts on here regarding LLCS. You literally haven't utilized this company yet, invested yet, nor experienced the outcome. Why the desire to post them all over BP?

Peter Stewart · Answer

True.  You'll want to talk with your CPA or tax adviser about this.

N/A N/A · Answer

What about having an LLC or at least a business entity for tax purposes?  If you do your investing under a biz you have much more tax benefits.

Peter Stewart · Answer

That's good advice.

The investors I've talked with said to plan on forming an LLC or another legal entity (depending on your situation) but don't worry about it for your first property.  The idea.... yes, you should do it....  no, it should not stop you from buying your first property.

Peter Stewart · Answer

That is the same advice I've heard other experienced investors say.  Buy the Million Dollar Umbrella Policy.

Robin Vidovich · Answer

Try to find a lawyer who specilizes in real estate and or has his CPA. He/She will be able to help you assess your liablilties for the type of investing you want to do.

Michael Rossi · Answer

AA,

No, you are not ever REQUIRED to have a LLC.  If you plan to only have one or two rentals and don't have a lot of other assets, then you might just buy them in your own name and have liability insurance on them.

If your plan is to build a significant rental property business, then I would buy all the properties in LLCs.

Mike

Peter Stewart · Answer

John - 
Thanks for the help.  I have attended one NWREII meeting but haven't been able to find their site until now.  
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Sorry about the thread hijack...  Back to the LLC discussion.