Starting out.. do you put Properties in LLC or personal name?

Question

Hey y’all, got my first home. Do you recommend to put it in an LLC? Or keep it under my name? If LLC what structure do you recommend or any tips at all.

Thanks,

David Shiling

James Wise · Answer

If you want to use traditional residential financing (them 30 year loans everyone talks about) then you need to keep it in your personal name. Utilize LLCs when buying commercial or buying property with partners.

David Shiling · Answer

@James Wise thank you!

Greg Schuricht · Answer

@David Shiling

Agreed that the Clint Coons YouTube channel is going to be one of the better sources of information on this subject.  Personally I use SMLLCs for each of my properties for personal asset protection.

Mike S. · Answer

There is not a single way to do this. You will find as many opinions as there are members on this forum.

What is your goal? What are you trying to accomplish? Do you expect to buy other properties? How long do you want to keep them? Are you self managing or do you use a professional property manager? Do you have other assets? What kind and what are their value? Which state are your assets in? Which state is your property in? What is its value? Are you in a lawsuit  exposed profession? How much would you accept to loose? Do you have a mortgage on the property? Do you expect to get a cash refinance?

The answers to all these questions would probably help guide you a little bit better as each strategy has its pro and con and you need to assess what would fit better with your specific situation.

For my specific situation, I decided to have each FL properties titled to a Land Trust (FL has great Land Trust statutes). Each Land Trust has its own FL single member LLC as beneficiary. All the FL LLC are owned by a WY multi members LLC. In addition, I have also a C corp that is the property manager and deal with the tenants.

If you are starting using entities to structure your assets, at the same time you should also plan for your estate as both, while not answering to the same needs, are easy to marry together from the start but would create a lot of headache if planed separately.

For all these reasons I would strongly suggest that you educate yourself on the field of asset protection and estate planning for real estate. I have spent hours reading many books on the subject and watching many training DVD and videos. But what really made it click the best was the Youtube channel of Clint Coons. Once you learn all the general concepts and get an embryo of strategy, you should consult with an attorney that is knowledgeable in real estate, asset protection AND tax optimization to draw your action plan. Then, knowing all the pro and cons of each strategy you will be able to chose the one that fit you.

There is nothing worse that using a strategy that you don't understand fully as any small mistake may bring your castle down. Also the bigger the strategy, the more expensive it will be to create and to keep maintaining year after year. A small dinghy that keep you afloat is better than a sinking yacht.

Dennis M. · Answer

Neither . Use land trusts . Maximum Anonymity and protection . Most people don’t know how to use them or set them up and most people fear what they don’t understand so they just put stuff in their personal name which is the worst way you can take ownership of a property

Costin I. · Answer

@David Shiling - make sure you need that level of protection prior to complicating your life with implementing and maintaing (!) such legal structures and expenses. The mortgage note itself is a form of asset protection.

My 2¢ only. Talk with a specialist, like @Scott Smith if you are convinced you need it.

David Shiling · Answer

@Greg S. Thanks Greg will be checking them out to learn more about asset protection.

David Shiling · Answer

@Jim K. Thank you!

David Shiling · Answer

@Mike S. I can’t thank you enough you just opened a whole new world for me to explore and learn about. I will definitely check the YouTube channel out and do some research to better educate myself. Thank you for your time and for sharing the knowledge.

David Shiling · Answer

@Jim Pellerin. Thank you Jim for your time and advice!

Starting out.. do you put Properties in LLC or personal name?

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