Syndication LP, do I need an LLC?

Question

Hi All,I am soon to invest in my first syndication deal, and they are under LLC.

Does having my own LLC provide any benefits as an LP investor? Or just I just go in as an individual?

Jim Pfeifer · Answer

You will get a lot of different opinions here!  I invest in syndications and use an LLC that is a disregarded entity - meaning it is owned solely by me. I get K-1's in the name of my LLC, but as a disregarded entity it passes through directly to my tax return.  I don't think it's necessary to invest through an LLC, but if you already have one like I did, there is really no downside to using it.  You are already protected from liability on the syndication investment through the LLC of the syndication so you don't need liability protection from that - but my understanding is if you are sued for something else (car accident, etc) that having assets in an LLC is better protection that having assets in your personal name.

Lane Kawaoka · Answer

Not a lawyer here but I would just do personally since that is the beauty of a LP position with little to no liability.

I would not think about doing any LLCs or holding companies until your net worth is 1-2M plus.

John Mazzella · Answer

An LLC is not necessary when investing in syndication. The syndication LLC is created and you purchase shares of that LLC as part of your investment, so you are already protected.

Scott Trench · Answer

Following this - great question! I just invest as an individual personally. Perhaps others do things differently.

Chris Seveney · Answer

@Brandon Craig

If you are a LP invest personally - easier on your taxes as k-1 is in your name and if you did it in your LLC they get a k-1 which then has to issue you a k-1.

Syndication LP, do I need an LLC?

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