Should I wait to buy my first property until my LLC is setup?

Question

Any thoughts?

John Underwood · Answer

Absolutely not, don't wait.

Why do you think you even need an LLC for one property?

Troy Green · Answer

I would not wait on an LLC this is a simple thing and can be done fairly quickly unlike losing out on a deal for waiting. You'll also want to put the property in your name prior to transferring it to your LLC. Banks tend to make the lending process a little tougher when buying through your LLC as opposed to buying it under your name and then transferring the property over to an LLC.

David M. · Answer

@John Joseph

Right...  that's generally people trying to sell you something or cover theirselves.  For starters, see this thread:  https://www.biggerpockets.com/...

In terms of cost, the biggest issue is having to use commercial loans since legal entities aren't eligible for conforming residential loans.  LLC's have their place, but not so much for residential properties.  Good luck.

John Joseph · Answer

Thanks for all the input. I really appreciate it. I have come across lots of arguments in favor of LLC's online (protection against lawsuits) but felt like it wasn't necessarily needed at this point.

John Romero · Answer

I’m new to all of this but I will say that I’ve found a few lenders, including the one I recently used, wouldn’t allow me to buy the property under my llc. Although according to the lender and the terms I am allow to transfer the property to the llc as an act of donation.

Chris Seveney · Answer

As others mentioned. Do not wait for your LLC to be setup. Not needed.

Michael Plaks · Answer

@John Joseph

According to Dave Ramsey, you should wait until you can pay all cash for the property. :)

On a serious note, never wait with business deals, for any reason! If a good deal is on the table - take it, as it may not be there tomorrow, for countless reasons.

Also, you probably don't need an LLC anyway, but it's a different topic.

Michael Scott · Answer

I second @John Underwood! Don't over complicate it. Once you start building a portfolio talk to your attorney and accountant to get an LLC setup. In the meantime just start. You'll also have better financing options.

Should I wait to buy my first property until my LLC is setup?

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