Should I LLC or not LLC ?

7 Replies

Hello all. I am sure it's out there somewhere on BP, but looking on the net there are so many conflicting Pros & Cons. Should I bother creating an LLC before I even make my first deal/purchase? Thanks to all!

You can if you would like, but it's not necessary. I did because I found it easier to find financing for my real estate goals and I knew it was inevitable anyway so I got it over with. In my state it's not terribly expensive and I want it to be a business so mentally, making it a business forces me to treat it as one.

I probably would not. Are you getting financing? Financing may be more difficult with a LLC. Worried about protection? Learn your laws, stick to them, and buy insurance.

There's a lot of conflicting advice out there because the answer really depends on your situation. If you have a lot of assets, then an LLC will give you an added level of protection. If you don't, then maybe an LLC isn't necessary, especially if you are buying your first property. Maybe you should instead look into an umbrella policy.

If you want to get better financing terms, buy the properties in your name. Once you have more equity/assets, an LLC might make more sense if you are concerned about asset protection. Either way, you should consult with a lawyer to decide which type of business entity makes the most sense for the type of real estate investing that you are doing.

Thank you everyone! Makes total sense not to bother right now if I will only have a couple to begin. Let's hope for long term future growth then go LLC!! Many thanks again!

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