Utilizing an existing LLC for different business purposes

[AJ Satcher]

I formed my first LLC in October 2022 for my Turo Business. For anyone unfamiliar with Turo, it is essentially like the Airbnb of rental cars. I stopped doing actual business under this LLC in June 2024. I've been wanting to get an LLC for my Real Estate/STR operations so instead of creating a new one, I figured I'd just utilize the existing Turo LLC. All I did was file an amendment to change the name of the LLC, but essentially it is still the same entity.

My thought process in doing this was to keep things simple - use the existing LLC and preserve its business history. I haven't done anything with the LLC since doing the name change because I want to tread carefully before moving forward. I'm trying to figure out if it is okay to move forward in using my LLC for my real estate OR if I should just close this one out since I'm no longer doing Turo and start a new one for the real estate.

Thanks!

[Ko Kashiwagi]

Hi AJ,

Definitely best to speak to an attorney but I have seen many investors use their unused LLC (that was previous for other purposes) for their real estate purchases so it's not an uncommon practice. If you are going to obtain financing, many lenders will want to see that the LLC is for real estate purpose, so you may need to amend a few things like the operating agreement but it shouldn't be a huge hassle.

Unless you need the business history for a specific reason though, it would be less risk if you just dissolve it, then open up a new LLC that is real estate purchase.