Just starting out and looking to invest in my first property - looking to keep the first one small 2-4 units, to get some experience in the day to day operations and other nuances of being a property ownership and residential landlording.
My first question ~ I am planning to set up a LLC to, obviously, limit my liability ~ is it more advisable to set up a LLC, put the down payment and other reserves (maint, Fees, etc.) in the LLC bank account or just start off buying the property as an private buyer and then setting up the company and transfer the asset to the company.
The reason I ask, is that I have 25-30% to put down, but what type of set up would make it easiest (for the first property) to get financing for the rest?
Thanks in advance for any replies, sugggestions, or questions
First off, congratulations on taking the first step. I would say that you are going to be better off talking to an attorney or tax advisor about company structure and liability. If you have not already, it's a good idea to begin building relationships with legal and financial professionals. You will need them time and time again as an investor. Often times a good closing attorney will give you that type of advice for a nominal fee. He/she may even steer you in the right direction and not charge you at all, with the prospect of doing the closing and title work for you in you up and coming venture. I will also point out that in the beginning lender are probably going to want you to use your own personal credit and income to qualify for mortagage. Business credit takes a little while to establish, and even so, lenders will still usually want at minimum a personal guarantee. Find you a good mortgage person and good realtor(r). In selecting you loan officer, attorney and realtor--make sure they understand what your goals and objectives are, and that they are eithier currently working with other investors, or atleast have some knowledge and expertise in the area of real estate investing. Feel free to contact me anytime. I'd be more than happy to give you one on one advice and referral(s) as well.
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