I am brand new to Real Estate Investing. I honestly believe i've found what i've been looking for my whole life. I due to close this week on my first 3bdrm sf investment property and is working thru my 2nd 3bdrm investment. My goal is to have about 5 rental by end-of-year with the possibilities of getting a minimun of another five next year. My biggest concern is starting right. My focus is primarily income and growth and I plan on doing this for the foreseeable future. Should I form a LLC and start everything related thru it or should I aquire a few properties first keeping it "ordinary"? What is the best way to start from 1? (Well zero--aint close yet)
Sounds like you're off to a good start!
It's easy to set up an LLC. Based on your plans, I'd set one up right away.
The pros of doing it your personal name are the ease with which you can get financing. The flip side to this is that with a little leg-work, you should be able to find local banks willing to lend money to you if you sign a personal guarantee.
The cons of doing it in your personal name are that you are not separated from your business and if you are sued your personal assets are at risk. You may be able to mitigate this with a better or different type of insurance policy.
If you want to do this long term and it be a business, I would go the LLC route. It's easier to keep it separated from your personal finances when you do it that way anyway.
Most lawyers are going to tell you to go the LLC route "just in case", but you will find plenty of folks on here who don't. I did an LLC, but I started all-in cash and am only now starting to finance stuff. I am also a scared-y cat about most things and an LLC makes me sleep better at night....
@Scott Schuetz undefined
Thank you. I am leaning that way.
@ Amy E
Thanks for the advice. The first two are all cash. Will probably try to squeeze out two more all cash then turn to financing.
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