I suppose I may just bite the bullet and schedule a meeting with a real estate attorney and tax person, but I am really considering getting a home equity loan on my current home to pay cash for a duplex. I currently have a paid for SFH (tenant is month to month, been there for 5+ years, never been late. Property is held in my personal name, I just pocket his payment every month. After I get another property I will probably start reporting income form both places and such). I read somewhere and it seemed like a pretty good idea to keep the property in my name and then set up an LLC to handle leases, maintenance and anything else that comes up. How do you guys hold title on just a few investment properties?
There are some who hold properties in LLCs and some who don't. The structure can get very involved if you wish, separate LLCs for each property and another LLC which owns nothing and manages the others, receiving all rents. There are advantages and disadvantages to both routes. If you use LLCs you must take care not to comingle funds between the LLCs and your personal accounts or they can and will be pierced in a lawsuit. Many investors who believe they are protected by LLCs are really not due to errors in the way they have managed the entities.
I understand the using an LLC as a shell (IE new LLC for each property and if it is not acting as its own business it isn't actually a business), but if I own each house in my name and then manage them from a separate LLC is that's a good idea.
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