Form the LLC first or wait till you buy the rentals.

1 Reply

So, just got done listening to podcast 109 regarding how to protect yourself from lawsuits. I realize that if you are going to hold rentals that obviously you do not want to do it in your name and you want to have those rentals in an LLC or series LLC or a DST. But, what is everyones opinion on when to set those up. I want to make sure I am protected but at the same time I do not want to go out and spend $2,000 - $5,000 setting up several LLC's and not actually use them for some time. Currently I am trying to buy fix and flips and wholesale but my long term goal is acquiring rentals. And, the money I would spend on setting up LLC's could be better spent right now on direct mail or my rehab budget.

Obviously not everyone who buys rentals has all of the correct entities set up prior to buying them and if they do set those up it is usually done after they are purchased.  

What is everyones opinion on this?  Spend the money before and not have any properties to place in them or wait till you buy your first one and then spend the money to get everything set up for that one and future properties?

Thanks.  

I have had LLC's done via legalzoom in a very little time - they have a rush service too. I would focus on finding the deals first.

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