I formed an Llc a number of years ago. I planned to buy property through the llc. Found out later that I couldn’t get a bank to loan to an LLC. Then heard that if I bought it and then transferred the property I own into the LLC could trigger a due on sale clause in my mortgage. Although I’ve heard Brandon Turner mention that it rarely happens, but could.
So now what I do is have a checking account by the name of the LLC with checks. Anything I due in my 5 properties I run it through that account so it’s separate from my normal checking. My cpa told me as long as I have an insurance policy on my rentals I probably fine. My LLC helps me organize myself financially.
So do I need it? I really don’t think so. But someone else may be able to advise better.
@Kyle Jenkins There are a number of questions that need answering in order to properly strategize and plan for something like this:
- How long have you owned the condo?
- How long have you been living in the condo?
- What was the purchase price?
- What's the value now?
- What's your intention? To rent it out for awhile?
You should definitely talk with your CPA and attorney about this to make sure you're guided in the right direction. Once you pick the best structure, entities are fairly easy to set up.
I paid 120k and have lived in it for 4 years. It is now worth 130-140. i plan on renting for the long term and transfer (im in the military) this summer and looking to buy a duplex.
What advisors do i need in my arsenal? CPA? Accountant? any more?
I think @Nicholas Aiola nailed it in the above post. It depends on a few different factors.
If you have questions about forming an entity add an attorney to your team as well as a CPA. They can explain the different pros and cons of different entity structures as well as the tax implications.
@Kyle Jenkins A good core team includes a CPA (specifically one who specializes in real estate investing), a real estate attorney, an insurance agent, realtor, mortgage broker, title company, lenders, contractors, etc.
You don't have to have all these at once before investing; your team builds over time. It's important to remember to only add people to your team who are qualified, who you trust, and who you feel comfortable with. Build relationships and your team will want to help you succeed!
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