so I was wondering if anyone had any feedback.. I am not a licensed realtor, and have no experience in the realty world, but I do have experience in the construction world, Do you think it would be beneficial for me to go ahead and get an LLC set up for myself to get the process of buying and renting going?
Would an LLC help me to make purchases seeing as that's a business, and I can then use tax breaks right away. I have some money put away right now but not a lot.
First, I would suggest you find a legal advisor and ask to discuss your goals for where you see your business heading. They will help guide you to the right structure you need. Then, save some money and form it yourself or find a professional that can create it for you. For example, my CPA can form an LLC for $400 plus the state filing fee. The extra money is worth it.
Yes, there are benefits and tax breaks of owning an LLC. But if you purchase your properties under your business, the rates will be significantly higher; on the flip side; it will be easier to find private or hard money. Also, if you plan on rapidly scaling, you will need multiple LLC's. For example, say you own one LLC with six properties and a resident falls on one of your properties. Every asset in that LLC is open to seizure. My rule, know I have not done this yet, will be five properties or a specific amount. If you're starting, it may be more beneficial to create an umbrella coverage.