Hello BP!!! I currently have a found an investment property and I am unsure if I should buy the property under my LLC or just buy it outright? It should be stated that I plan on buying the house with cash, and my LLC has been formed strictly for buying properties, but this would be my first time doing this. I'm just not sure which one makes sense? PLEASE HELP!
@John Morgan are you planning on getting a loan on it after you fix it up?
@John Morgan It's not that serious. You can buy it in your name, then transfer ownership to the LLC, you can buy it under the LLC name, or you can put it under contract in your name and assign the contract to the LLC at closing. The LLC is owned by you and is only a barrier for litigation if someone sues you and actually wins the lawsuit. Probably not likely in either case. Your insurance coverage is affected if it is in your name or the LLC name. Talk to your agent about the differences. A good liability policy is the first step in protecting you from a lawsuit.
I plan on doing minor repairs due to the fact it is in pretty good conditions now!
I plan on flipping it also once I make a few minor upgrades
@John Morgan if you're flipping I would just use the LLC then for liability protection. I know some big time flippers use an S corp but that is usually just if you are doing a lot of flips for tax benefits.
Does it make a difference if the property is a HUD home?
@John Morgan Are you buying as an owner occupant or an investor?
Yes it does make a difference that it is a HUD home
You will need to provide proof of funds in the name that you purchase the property. So if your funds are in your personal name you will need to buy under your personal name and vice versa
I will be buying it as a investor
What difference would it make with it being a HUD property?
A listing agent would more than likely accept proof of funds that didn't match with an explanation
HUD's Asset Managers will require the proof of funds to match the buyer or it will be kicked back
Ok thanks a lot! Very great info!
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