LLC Before or After First Investment

[Sam Mohler]

Hi everyone! My husband and I are getting started on our REI journey. We have good income, money to put down and our credit is good. I'm reaching out to a lender to assess best options for us. I was wondering if anyone has taken out a person loan first, how hard was it to get switched to an LLC after. Do you wish you would have had an LLC prior to your first investment purchase?

[Stuart Udis]

It becomes far more expensive to transfer title to an LLC later on. The caveat is if FHA financing is availalbe. I always recommend taking advantage of the leverage if the opportunity presents itself. A good FHA purchase is the best ROI an investor can achieve and a great way to jump start your real estate investing. If you aren't pursuing FHA financing and its an investmnt property use an LLC, but keep it simple.... an LLC in the state where you live or the state whrere the property is located is all you need. No holding companies, management LLC's or WY,NV or DE LLC's. Terms at small banks aren't that different for a property in an LLC. They are more concerned with the guarantor. If the difference is that impactful on whether the investment pencils, it probably isn't a property you should be pursuing anyway. Most importantly be a good operator.... treat tenants well and maintain the property, avoid premises laibility exposure, sign contracts and hire licensd and insured contractors. It's honestly the best line of defence and also helps your property perform at its best.