Starting out should you start an LLC?

Question

I am wanting to get into real estate investing. I want to get rentals of any style multi-family single family maybe even commercial. Before I jump in I am doing research and trying to educate myself as best I can.

My question should I get an LLC?

Thanks all

My question should I get an LLC?

Thanks all

Kyle Witham · Answer

@Matthew Crivelli

Thanks! I do want my family and personal stuff separated. And I live in AZ and hear it’s super easy to get lol!

Very much appreciated

Matthew Crivelli · Answer

@Kyle Witham

Yes!

It opens up a ton of ways to fund properties.

It will make you look way more legitimate and you will feel it too lol

It protects your personal assets. (Important one)

It's really not that expensive or time consuming to get it done. (Unless you live in Cali lol)

Kyle Witham · Answer

@Mike McCarthy and @Aigo Pyles

Thanks so much I want to buy and hold the rentals. I can’t jump in and buy a ton it’ll be a slower process so I think the umbrella and landlord route is probably the best and if I am able to grow it well enough sorry about the LLC down the road. Thanks so much for the input. I have a lot of research ahead of me.

Again thank you guys so much.

Mike McCarthy · Answer

@Kyle Witham my recommendation is that it depends the direction you go.

For 1-4 family long term rentals, an LLC will hurt more than it helps. You’ll need commercial loans, which will cost more and be harder to get as a new investor. It’s better to buy them in your name, get a conventional mortgage, and protect them and yourself with landlord and umbrella insurance.

For larger properties, you’ll need a commercial loan anyway, so you should start an LLC.

For flipping, an LLC is probably worthwhile, but out of my range of expertise.

Unfortunately many people get caught up in the details. The most important part is to find a good property and get started!!

Aigo Pyles · Answer

That depends on what you prefer. LLC for your rental property is a smart choice. Beside from protection, it will provide you with flexibility when it comes to taxation, management and ownership.

All the best!

Kyle Witham · Answer

@Antoine Martel thanks I have my homework cut out for sure. Don’t want to go in without a plan in place.

Kyle Witham · Answer

@Da'Shawn Murphy

Appreciate it! I will talk to some local credit unions to then some banks I like to try and keep it local if I can. Thanks again!

Da'Shawn Murphy · Answer

Hello Kyle,

I agree with Antoine that you can do either because it ultimately depends on what you prefer. To my understanding you have 4-10 homes that you can get in your personal name that some people state may offer a lower interest rate than your LLC (I would contact your local credit union or bank to verify). Also, I also came across that if you start the home off in your name, then try to move it over to an LLC, you could run the risk of the total payment being due (again contact the bank or credit union to check). Hope this helps some!

Antoine Martel · Answer

Hi Kyle,

You can get an LLC or you can get general liability insurance.