My wife and I owe nothing on our home and her hair salon next to our house, would it be smart to have those properties underneath our LLC or should I leave it under our own names? We are refinancing those properties to start our real estate investment journey.
I'm wondering about tax implications or potential legal issues or anything like that.
I like the idea that I could say my LLC owns two properties right from the start but if there would be problems that wouldn't be worth it then I need to know that.
I would not put your own home in the same LLC as other businesses or investment properties. Main reason to do an LLC in the first place is to limit your liability if something were to go wrong and you get sued.
look up the homestead protection in your state. in MA you are protected up to 500K for your personal residence..if you put it in an LLC you lose that protection. I think you also lose some other personal residence exemptions..I would consider keeping properties separate that way if you get sued they can't get at your whole portfolio.
A better strategy for your personal home (verify with a lawyer) and most of your assets is to get a trust established. Trusts help reduce the amount on probate needed when your "time" is up on this earth.
But keep the personal completely separate from the LLC.
@Chris Marshall the short answer is no. There have been some very detailed answers to that question before but I don't have a link. If you can find them they have laid out the reasons why it is a bad idea.
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@Chris Marshall - Listen to Brandon Hall's podcast (196 if I recall correctly?). Anyways, he outlines, near the end of the podcast, some reasons holding title to your personal residence in an LLC is a bad idea.
Hey thanks everyone and actually I did listen to that podcast like an hour after posting this question, but yeah I guess I will not out my personal residence under an LLC haha! Thank you all!
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