Does anyone buy real estate with an LLC

Question

I've been asked by friends and family if I'm going to get an LLC. Their idea is that it will protect me and my personal assets. My honest answer was that I didn't know, and I would ask here.

So, does anyone here use an LLC when buying real estate? If so, why?

And I would also love to hear anyone's ideas on this matter.

Danielle Gray · Answer

Hi Weston,

The answer to this depends upon your financing strategy. Certain types of lenders don't allow for purchasing under an LLC. When most go this route they purchase under their name and use an insurance plan to cover them. When purchasing under an LLC there are also limitations with conventional mortgages.

I usually don't recommend my investors to purchase under an LLC until they have so many properties. Having one or two properties is not reason enough to use one. When you reach 3-4 properties, or even commercial rental property size, then yes, and LLC is necessary. At that point lenders will begin denying loans because of too much liability. Having it under an LLC helps with this and allows you to purchase more property.

So basically, my recommendation is have a strategy in place before just opening an LLC. Depending on where you are in your investment journey, and LLC may not be necessary just yet.

Kayla Givens · Answer

Hey, Weston! I recently watched the BiggerPockets episode "Should You Get an LLC For Your Real Estate Business" and found it very helpful! Hope that helps!

Bob Dunn · Answer

It is always a good idea to have an entity set up for any business venture.  An LLC is an easy, low cost way to protect your personal assets and separate you from your business. Set up your LLC and when you start seeing good revenue and profitability, you can consider the S Corp tax status.

Chris Shepherd · Answer

Ha! My entire county has 40K people and probably 30%+ of the county still doesn't have high speed internet in 2021.

Bob S. · Answer

@Chris Shepherd GOOGLE,

Good Luck

Chris Shepherd · Answer

@Bob Stevens , how do you find your local REIA meeting?

Bob S. · Answer

@Weston Holt   of course, never use your personal name. I suggest you go to your local REIA meeting , connect with those doing deals, learn then apply what you learn,

Good Luck

Jimmy C. · Answer

We use an S Corp for flipping and LLC for rentals.   Also the companies are the beneficiaries of individual Land Truats that are created on each purchase.

Weston Holt · Answer

@Kayla Govier Thanks for the link, I will definitely check it out

Does anyone buy real estate with an LLC

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