I am a complete newbie. I have recently inherited a single family home that I would like to use as my initial property with plans to expand rental portfolio. Should I transfer this home in to my name initially or should I just create an LLC out of the gate and transfer title directly to LLC? If so, will that limit equity I can pull from home which currently has no mortgage and is paid in full? Advice or guidance is appreciated.
Congratulations! Nice to see more people getting into investing. To answer your question about the LLC: it depends. This article covers what I call the 5 Pillars of Asset Protection. The main reason you would want to place the property into an LLC would be to limit the liability between the property and your personal assets. If you don't have an LLC in place and there is a lawsuit that insurance doesn't fully cover, or is excluded from your insurance, then they can get a judgement or settlement against the property and your personal assets. If there is an LLC in place the you and your assets are legally separated from the LLC, as long as you aren't doing anything illegal... That means you are creating a stop-gap for a "worst-case-scenario" and protecting yourself with the LLC. Some people are comfortable with holding property in their personal name and accepting the risk, while others are not. You just need to recognize that the real estate investing industry is one of the most litigated industries in the United States.
The issue you can run into if you want the protection of the LLC is that lenders (and not all lenders will offer a loan to a new LLC) will only offer you commercial loans, which have higher rates than a personal loan. You can work around this issue through the introduction of a Land Trust, meaning you can have favorable financing and still remain protected under the LLC - it just takes a bit more work to set up. This article goes over the process a bit more.
Thanks for taking the time to reply. I will be sure research the introduction of a land trust because I do want to make sure I separate and protect both ourselves and our personal assets.