Why I filed for a LLC. Only own 1 property too.

[Cody Barrett]

One popular question on BP is the question of "should I file for a LLC" or "Do I need one?"

I definitely do not have that answer because everyones intentions, needs, and goals are different. 

But... I decided to file for one because of what I plan on doing with real estate. I think a lot of that decision goes into what you want out of this business and what your lawyer recommends. After speaking with my lawyer and telling her of my goals (short and longterm) we concluded that a single member LLC will do the trick for now. I only own 1 property at this point but I am working hard to grow and make that next investment asap. So eventually I will have a few properties and if assets from 1 property becomes under fire, I don't want my other properties to come under fire. So eventually I would assume series LLC's will be used to keep me safe. Again that is down the road but it also doesn't mean I shouldn't prepare a solid foundation to build off from when that moment comes. It is also not very expensive for me to file for one, which helps...

Again.. This post doesn't have any proper information in it for one to decide what is best for their business or themselves personally.  But I always enjoyed reading other people's experiences and why they decided to do something with their business so I figured I'd throw an experience out there. 

Good luck!

[Pavel U.]

Originally posted by @Gloria Mirza:

To protect your properties you would need to have one LLC per rental.

I disagree. You can have multiple rental properties per LLC, just spread them out nicely. I also suggest getting an umbrella insurance as well. If properties are paid off, you can also register one LLC to be the "Bank", i.e. you are the Bank essentially. Then mortgage those paid off properties by that same Bank. If someone was to sue you, and they got into your LLC, the Bank (you) needs to be paid first, then whatever is left (almost nothing) goes to the winning party.