First Purchase, Personal Credit or LLC

[Evan Boychan]

Hello! I am a new investor looking for my first deal in the Ann Arbor area. I'm primarily looking at single family homes, condos, and off market opportunities. I'm curious what metrics people use to decide whether to purchase their first properties under personal credit/financing or under a new LLC. Does it just come down to qualifying for certain loans/lower interest rates? If you go the personal route, is it easy to transfer properties over to your LLC at a later date? Lastly, what are some tax/insurance implications of the different routes?

[Kevin Sobilo]

Quote from @Evan Boychan:

Hello! I am a new investor looking for my first deal in the Ann Arbor area. I'm primarily looking at single family homes, condos, and off market opportunities. I'm curious what metrics people use to decide whether to purchase their first properties under personal credit/financing or under a new LLC. Does it just come down to qualifying for certain loans/lower interest rates? If you go the personal route, is it easy to transfer properties over to your LLC at a later date? Lastly, what are some tax/insurance implications of the different routes?

Sometimes the decision is based on strategy. For example is someone is going to house hack and buy a 1-4 family to live in one unit they can get better financing options by purchasing in their own name to begin with because they will live in 1 unit as their primary residence.

However, if they are doing a BRRRR and buying a vacant uninhabitable home to rehab into a rental then they may be looking at a hard money loan to purchase and then they might as well do that within an LLC.