I just bought (in cash) a small 700 sf ft foreclosure (move in ready) for less then the cost of a new car. Plan is to live in it for 2 years (min.) and save for another house or duplex, moving into that one and rent out the first one and the other side of the duplex. Since there won't be any mortgage on the first house I feel it'll kick my income up a notch.
Some questions might need to be asked to an attorney, but thought I could ask here first.
When I buy the 2nd house, can I create a LLC and do a quitclaim deed so my wife is not involved with any work. She's a worry wart and just wants to sell the house for a 1031? Thinks it's too much of a hassle to deal with tenants.
2nd question is when I open up a new bank account for the LLC, can I use some of the funds to buy a used truck? Or am I wrong in thinking that a LLC is like a company and can use the company money for company expenses?
I've already figured a percentage each month for maintenance/repairs, tax and insurance. So what does a person do with the extra money left in the bank account for the LLC when it's not really personal funds to be used?
Thanks for any advice and open to all suggestions.
If you only have the one house and you plan on moving into it for the next two years and then buying another property you are thinking (in terms of needing an LLC) way ahead of the current game you are playing.
Also, you cannot do a 1031 on a property you live in. However, if you live in it 3 of the last 5 years, you can qualify for a section 121 exclusion and salvage the equity without paying capital gains tax.