Buy new home and rent out first, or stay and buy a duplex??
Hi everyone,
First time poster here... :) My husband and I are moving forward with real estate investing and would like some advice from tax and legal standpoints. We are trying to decide between:
1. purchasing a new home with a trust and renting out our first home, which was purchased in our names. Then doing a cash-out refi on our first home in Oct 2015 (when we told by our bank we can get out of the PMI) and buying a du/tri/fourplex with an LLC. And after the cash-out refi, putting our first home into the LLC.
2. purchasing a du/tri/fourplex with an LLC and remaining in our first home until Oct 2015 and then doing a cash-out refi to buy our new primary residence. Then renting out both the duplex and our first home after putting our first home into the LLC.
We're ultimately concerned with protecting our assets in a worst case scenario-type situation. We are already planning on getting an umbrella policy but would also like to take advantage of the protections afforded by an LLC (which undeniably aren't too strong in the great state of CA). Which is why we're also thinking about incorporating in Nevada and and doing business in CA.
Any advice and feedback on what we should do - or what we should also take into account - would be greatly appreciated!
Thank you!
Grace