Investor · brentwood, CA · Member since 2016 · 1k+ posts · 730 votes
5y
Never used one in 20 years, and I've avoided all the expense of setting them up, costs of maintaining them and the cumbersome and convoluted administrative aspects of operating with them.
But I must admit I have missed all the benefits of being able to hobnob with those pretending to be players by showing off my all my LLCs. It's been really rough in that regard, but I'm working through it.
Investor · brentwood, CA · Member since 2016 · 1k+ posts · 730 votes
5y
Never used one in 20 years, and I've avoided all the expense of setting them up, costs of maintaining them and the cumbersome and convoluted administrative aspects of operating with them.
But I must admit I have missed all the benefits of being able to hobnob with those pretending to be players by showing off my all my LLCs. It's been really rough in that regard, but I'm working through it.
Real Estate Agent · Owatonna, MN · Member since 2017 · 221 posts · 152 votes
5y
@Misael Carlos Vera it's more of an asset protection play. Tax benefits should be the same regardless. You need to determine for yourself if it's worth the risk. Good luck!
Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
5y
We never use LLC's for properties we intend to keep. We buy a landlord policy from a strongly-rated insurance company and a personal umbrella policy that schedules all of our rentals.
Rental Property Investor · New York, NY · Member since 2020 · 100 posts · 93 votes
5y
@Dillon Dale Wow. This entire time I was under the impression that you needed an LLC to perform a lot of tax advantages. I think I need to do more research on the legal and tax side of real estate.
Real Estate Agent · Owatonna, MN · Member since 2017 · 221 posts · 152 votes
5y
@Misael Carlos Vera yeah, definitely check with your cpa tho because I could be wrong, but that is my understanding of it. I do use LLCs for my properties but it is more for the legal aspects for me
@Christopher Smith. I like the confidence! I'll keep that in mind. Just curious though, have you ever been sued by a tenant/buyer?
No.
I have a question for you. Have you personally ever heard of a landlord being sued for an amount exceeding basic liability coverage?
I haven't in over 20 years despite inquiring on innumerable occasions for real cases involving prudent landlords. Kind of makes one really wonder if all this law suit scare mongering has any foundation in reality. From what I can see it's very roughly 99.99999% myth and urban legend.
Rental Property Investor · Acworth, GA · Member since 2020 · 70 posts · 25 votes
5y
@Misael Carlos Vera
I read into this as well. I'm just going to do a $M home insurance policy and use a property management company and not do an LLC. Just have them send the net rent checks to my personal bank account and that's it. Don't think there's any tax advantages so no point to set up an LLC...
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
5y
@Misael Carlos Vera Keep in mind your lending options drastically reduce when you buy in a LLC as opposed to your personal name. Also your rate and term will be very different also. Make you fully look into all of this before making the decision to see if it is right for your situation.
Rental Property Investor · New York, NY · Member since 2020 · 100 posts · 93 votes
5y
@Michael Noto. I'm starting to realize this! I've been calling lenders and when I say that I'm buying under an LLC, they transfer me to their commercial team who has way more expensive loans.
Are you saying that it's possible for me to buy investment property using a residential mortgage?
Rental Property Investor · New York, NY · Member since 2020 · 100 posts · 93 votes
5y
@Kevin Lanphear. That's what I'm learning! Also if I can avoid taking a commercial loan, I'll be able to get a residential mortgage with a lower down payment and interest rate. I shouldn't have assumed that I needed an LLC.
Rental Property Investor · New York, NY · Member since 2020 · 100 posts · 93 votes
5y
@Christopher Smith. Thank you so much! My options for financing really open up if I buy things without an LLC and now that I'm learning a lot of asset protection methods, I think I have a couple more ideas for financing my first property.
Never used one in 20 years, and I've avoided all the expense of setting them up, costs of maintaining them and the cumbersome and convoluted administrative aspects of operating with them.
But I must admit I have missed all the benefits of being able to hobnob with those pretending to be players by showing off my all my LLCs. It's been really rough in that regard, but I'm working through it.
hey, what do you do if some frivolous creditor or predator comes and gets a judgement or claim against you which attaches to your properties? How do you handle that?
Flipper/Rehabber · Corpus Christi, TX · Member since 2020 · 56 posts · 8 votes
5y
Just wondering, I know small business got a pretty good tax break (20k off the top) with that Trump reform. Wouldn't an LLC for property be able to take advantage of this?
I like this thread, I was planning on doing an LLC but now it makes me question a bit more. Definitely going to spend some time on this aspect.
Just wondering, I know small business got a pretty good tax break (20k off the top) with that Trump reform. Wouldn't an LLC for property be able to take advantage of this?
I hold my commercial assets in LLCs, but not residential. Financing and insurance arent affected.
As to the business taxes being less, it's 20% not $20k and only after certain thresholds are met. In my experience last year only one really well performing community benefited a little.
Like most of that tax policy, it only benefited the already well-off IMO. Small time America got zip.
This is the most FAQ question and I can summary here: - Cost to setup LLC is expensive especially in CA - You could cover it by having good liability + umbrella - And most importantly, I can't find regular banks that's willing to lend to an LLC ( so far )
I think LLC is worthed if you want to buy apartments, but then I need to borrow money from HML which is costly (I may not be true here) . Then I go back with just SFR/MF with individual name so we can maximize 10 financed homes.
Are you saying that it's possible for me to buy investment property using a residential mortgage?
They can do purchase, cash-out refi, even rehab loan for an investment property with an interest rate below 3%. Just find a lender that's investment-friendly though (that's my experiences).