Realtor & Investor LLC

4 Replies

Hello All,

I am a licensed Realtor of 2 years with limited experience. I am also a RE investor newbie who is evaluating multi-families as I write this post. My question to anyone who wants to answer is this... Would it make sense for me to start an LLC which incorporates both my entities as a Realtor and an investor? I never started one when I got my license originally but I plan to do so now. Just wasn't sure if it would be smarter to separate the two and have one to protect my assets as an Investor? Any input would be appreciated.

Hi @Mike Iafrati , we generally start a new LLC every 3rd house we buy.

Even though the LLC can protect you personally, someone can still sue the LLC and take the assets within it.

Therefore, if you have ALL your houses in one LLC, theoretically, they could all be exposed.

So we try to minimize it by keeping no more than three in each entity.

For that reason, I'd probably start a separate LLC for your Realtor business.

My 2 cents.

Originally posted by @Mike Iafrati :

Hello All,

Would it make sense for me to start an LLC which incorporates both my entities as a Realtor and an investor? I never started one when I got my license originally but I plan to do so now. Just wasn't sure if it would be smarter to separate the two and have one to protect my assets as an Investor? Any input would be appreciated.

After consulting professionals, I have different entities for different income types/business purposes. 

Do not comingle income types - active (realtor/job) income needs it's own, passive (rental) income it's own.  That's like rule 1 to me.  

Consider using an s-corp or having an LLC taxed as an s-corp for active/job/management income after consulting with a quality tax pro. My mgt/consulting/lending/wholesaling, etc entity type is an s-corp, but I wanted defined benefit retirement plan options. YMMV.

I personally only buy commercial assets with LLCs, not little houses, but mainly wanted to advise you not to combime income types and/or different business purposes within the same entity.  

Thanks guys, appreciate the info. My plan is to purchase large multi-family so an LLC would seem like the best choice for my investing entity. I never thought of the benefits to multiple LLCs within the investment co. umbrella. Food for thought.

Mike,
Perhaps creating a series LLC is a good option for you. Consider consulting an asset protection attorney.

Originally posted by @Mike Iafrati :

Thanks guys, appreciate the info. My plan is to purchase large multi-family so an LLC would seem like the best choice for my investing entity. I never thought of the benefits to multiple LLCs within the investment co. umbrella. Food for thought.