We got the house! Now what..?

Question

Hi everyone,

After 4+ months of waiting, my cash offer on an investment property short sale in upstate NY was accepted!  Very excited about this and looking forward to the closing this month.

My question is really around fully protecting myself during this process, the reason-being, we're buying this short sale all-cash and the cash comprises the vast majority of my savings and liquidity.  It would be devastating to lose all or a large chunk of this.

What are the "must-do" things now to make sure we are:

-- Insured (fire etc) from the minute we take ownership?

-- Protected from any other issues that could risk losing this $

-- LLC (I'm told that's a must-do now, to get the LLC created and buy the house under the LLC)

Any help appreciated - thanks!

Jeff Rabinowitz · Answer

Congratulations. I hope you have left yourself enough of a cushion to get this house rent ready and cover any vacancies if your plan is to hold. Yes, get the house insured at closing to protect your investment. The LLC may not be as necessary as you have been told. First, if your offer to purchase has been made in your name you may not be able to buy the property under any new LLC you create. The contract is between you and the seller not the LLC and the seller. You will probably be able to transfer the ownership to an LLC after purchasing but what will that gain? If you have few assets outside of this property what are you protecting? What do you plan to do with the property? I know many investors (myself included) who operate rental properties without LLCs.

Steven LaLonde · Answer

Thanks @Jeff Rabinowitz I appreciate it - I did an LLC for this one but for future reference it's good to know that it might not be required; I'll research further.