When to incorporate with a Buy and Hold strategy

4 Replies

I eventually want to own several properties that I will rent out. I understand the merits of creating an LLC or some other legal protection entity.

Now at my point, I don't own anything though I plan to get my first property in the next few months and rent it out (owner occupied).

Do you suggest I create an LLC and buy the property through that? Should I get the property under my name and manage the tenants through an LLC? Should I worry about all of this later when I own more properties?

Thoughts please.

Thanks

Hi Josh,
A couple questions.
1. Are you buying throw house with cash or a mortgage?
2. Do you own other assets?
3. How many units will the property have other than the one you live in?

*Eric. I was reading a post by Josh earlier.
.. sorry that was on my phone. If the typos make it incomprehensible let me know

Originally posted by @Joseph Sherer :

A couple questions.
1. Are you buying throw house with cash or a mortgage?
2. Do you own other assets?
3. How many units will the property have other than the one you live in?

1) Mortgage

2) Motorized vehicles and retirement accounts

3) The first property will be a single family townhome that I will be renting individual rooms. (3 rooms other than my own, eventually 4 rooms when I move out for another property).

I want to keep this property in the longterm as part of my rental portfolio.

My advice would be to put the property in your name and get an umbrella insurance policy in addition to home owners' insurance. You will have a hard time finding a bank willing to lend money to an LLC that has no credit or assets. You could personally back the LLC but I'd like an attorney on here to weigh in on the value of that. Also, have you looked into LLC associated taxes in your state?

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