Buying Multis under individual or LLC ??

Question

As I am entering the beginning stages of owning multi families, I am looking for advantages of putting properties in my name or should I use a separate LLC for each property?  Which is better for tax advantage point?  Also which is better when it comes to getting finance?  Do I become a bad risk to banks if I have properties in my name?  By keeping in LLC's does that not effect my personal credit and financing capabilities?  Newbie needs advice. Thanks.

Brian J Allen · Answer

Make sure to check with your advisors as to if you can put the properties into the LLC after purchase.  Often those protections of the LLC do not transfer if you buy personally then put the property into the LLC after.

Aaron K. · Answer

Liability protection primarily, depending on the state it can be a cheap one time fee.  It is used like watertight compartments on a ship, some can flood without sinking the whole thing.

Stephen Neto · Answer

So my next question is why do some people put properties under LLC's anyway?  I assume it is more for liability protection against the individual ?

Aaron K. · Answer

Taxes are probably going to be the same either way, if you plan on investing in MA each LLC has a pretty high annual fee 2nd only to CA I believe.  Financing will probably be easier in your own name and if you do get it through the LLC you may have to personally guarantee it anyway.