Just started learning this stuff

5 Replies

Hello everyone! I just read Rich Dad, Poor Dad and recently started The Book on Rental Property Investing and I have a question. Should I create an LLC before buying my first property? I'm sorry if this has been asked before, but I haven't seen it answered in the books as of yet.

That depends on what your strategies are going to be, but I did...and I think most do. I used to have an LLC for each rental property, and an S-Corp for flips (tax and liability reasons), but there are many ways to structure this...and many ways to use LLC's. One of the reasons I still have Rentals in different LLC's is it allows me to have different partnerships for each rental...if needed.

In all cases, I'm not personally attached to anything...my main LLC(s) are. My LLC's are the partners in the LLC partnerships.

Hi Brian,

Great job getting started and building your foundation by reading books! 

My question for you would be.. Is not having an LLC holding you back from getting started? Often times when we are getting started in real estate we have the idea we have to have an LLC, business cards, logo, website, facebook page, etc. When really these things are the minutia that are keeping you from just getting started and doing what you should be doing, which is buying your first property! :)

An LLC is not necessary for you to purchase your first property. If you do not already own a primary residence, most people would start there. Purchase a 1-4 unit with a 3.5% down FHA loan and rent out the other units, or bedrooms in the home. That will get you started on the right foot. Owning a cash flowing asset and/or living for free. Just keep learning and analyzing deals so you know a good deal when you see one.

Talk with some local lenders and agents and they'll be able to guide you to having all your ducks in a row so you can make the above happen! 

I wish you luck, my friend!

Thanks for the reply! I figured that it would make sense to have an LLC, but I wasn't sure. And I never would have thought to have one for each property. And what is an S-Corp?

As of right now, my strategy will be single and multi family rentals.  Most likely here on the East-side of Cincinnati at first, since it's where I live.

Anthony, the only thing that's holding me back is a lack of knowledge.  I'm not the type to just run blindly into something without any kind of information about it first.  :)

Originally posted by @Brian Downs :

Anthony, the only thing that's holding me back is a lack of knowledge.  I'm not the type to just run blindly into something without any kind of information about it first.  :)

 Good move.  Just "jumping in" can lead to disaster...and slow you down having to recover from mistakes you probably wouldn't have made with more knowledge.  There's a limit to how much you need to start.