Do I need an LLC to buy my first rental property?
Hi everyone,
I am a new investor in the Tri City area in Michigan. (Bay City, Saginaw, Midland). I am looking into multiple different multi and single family homes to start applying the Brrrr strategy to.
I am wondering, should I start an LLC in order to begin buying property? I have some concerns of "worst case scenarios" imagining a tenant sueing me for something rather than a business that can be liquidated quickly and closed if it went that badly. Newbie worries I assume. Anyway, what are everyone's opinions? Pros and Cons to each? Thanks in advance.
Most Popular Reply
I'm sure you will get all the pros from others which is basically just litigation protection.
Cons include expense of creating the LLC, extra CPA fees at tax time, difficulty getting a loan on a property in a new LLC which can really impact the BRRR strategy. Most of all though it is an excuse not to get started.