I’ve been studying real estate quite a bit lately and I’ve known for quite a while that this is what I want to do. I’m almost 40 years old and never set up any type of retirement. I just want to do it right from the start. Does anyone have any suggestions?
I think an Umbrella policies is a better option to start until you build your portfolio to a size where start affecting you on your Taxes.
You don’t have to.
@Jason Gore it all depends on what size building you want to buy first. If you are doing a 1-4 unit, then you will need to buy in your personal name to get conventional financing. If you are buying 5 or more units then you can start out by purchasing in an LLC. The other side of this is to really think through what assets you have. An LLC is for asset protection, but it costs real money to keep an LLC operating correctly (accounting fees, filing fees, business banking). If you don't have many assets, it is much simpler to just buy it in your personal name and get an umbrella policy as others have said.
I didn't, and have no regrets. I do have an LLC for my short term rental, but it didn't need bank financing, as the owner financed. With single family homes...The financing is the part that makes the LLCs more challenging. I ask for owner financing on every deal, so I can use the LLC structure easily.
Insurance covers the liability aspect, so it is usually beneficial to get traditional financing, in order to maximize cash flow on the first 10 properties. From there, portfolio lending.
Thanks to all of you. This is great info.