As title says. What's the benefit of purchasing as an LLC vs individual and vice versa?
Also if you purchase a home through an LLC, are you still possible to purchase a home as an individual using FHA?
@Kyle Swarts I just purchased 3 homes for LT rentals and my bank, Wells FArgo would not let me close the loans in the name of my LLC. Seems pretty common practice as banks want to be able to hold someone accountable for the mortgage and they have trouble doing that with an LLC. My option is to close in my personal name and then transfer them into an LLC
@Anthony Parisi I actually heard something about that on a BP podcast yesterday. Guy said him and his partner co signed on the loans with the LLC for that exact reason. Maybe I'm mistaken, but something a long those lines!
Just finished this part of the beginners investor's book from BP! Basically they say that either way is fine. An LLC is just that, limited liability for the founder. So if the LLC goes bankrupt or gets sued (not that we're hoping for for that obviously) then your personal finances would be untouched. They say that either way you need to keep your business and personal finances separate.
@Anthony Parisi , let me know if you have experienced this, but that same chapter also said that "transferring" the title from your person to your LLC could trigger a balance due clause. In other words, the lender would assume that since you sold the property (even though you didn't) that you've been paid, so they should be paid.
@Kyle Swarts The benefits of purchasing a home through an LLC is to protect yourself and the assets you own. If something goes horribly wrong then it's your company that goes down. If someone tries to sue you for something then they have to sue your company. A lot of investors will do this to be smart on the liability side as well as potential bankruptcies. Some investors will also create an LLC for each investment property they own or maybe will group some together. On the flip side, if you signed as yourself, you are personally 100% liable for everything.
@Melissa Barnard Great information thank you!! Sounds like a great idea. I'm assuming an llc Is better for tax purposes as well?
Also, off topic, but how can I find where I've previously posted? I posted something lengthy and maybe it was in the wrong thread. Not getting any responses.