Moving A Flipped House From Personal Name Into An LLC

[Jeremy Ludwig]

I have a property that I purchased and flipped while it was in my name. I was thinking of opening an LLC and putting the home into it before I list it. Would I still be able to write off all of my expenses and interest if I change the ownership from my name to an LLC?

[John McDonald]

Quote from @Jaycee Greene:

Quote from @John McDonald:

We have a single LLC setup for our Flips and another for each of our rental properties. This reduces our personal risk while allowing pass through P&L for the various activities. It's a smart move on your behalf. if you are planning to continue to invest in flips, I would simply use the new LLC for all of your flips. It reduces hassle as you grow.

Please reach out directly if you have any questions. I'm happy to help. 

That's interesting, @John McDonald. Is there a specific legal/liability reason why you separate your LLCs by "line of business"? Or perhaps you have a DSCR loan on your rental properties and that keeps the fix/flip income (or loss) from affecting the DSCR calculation and tripping the covenant?

It's both the reasons you mentioned. It keeps the books clean and separated between our short term investments and long term investments, which have a different thesis for each investment type. It also limits risk. If one of our tenants decides to sue the LLC, there's limited assets in the business(little cash and only one property). We feel that this structure, while a bit more complicated, really works well for us.