Is an LLC the best option?

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Benjamin AakerPro Member
Rental Property Investor 路 Brandon, SD 路 Member since 2015 路 1k+ posts 路 1k+ votes
4y

I have used an LLC for all but one of my properties. I like the liability protection that comes from separating out the businesses. If one takes a loss, it shouldn't spill over on to the other ones. There is also the benefit of having an extra layer of anonymity that comes from having the LLC own your properties. This will probably vary state to state. I have transferred my first property from personal to an LLC. It cost about $800 with an attorney.

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  • Benjamin AakerPro Member
    Rental Property Investor 路 Brandon, SD 路 Member since 2015 路 1k+ posts 路 1k+ votes
    4y

    I have used an LLC for all but one of my properties. I like the liability protection that comes from separating out the businesses. If one takes a loss, it shouldn't spill over on to the other ones. There is also the benefit of having an extra layer of anonymity that comes from having the LLC own your properties. This will probably vary state to state. I have transferred my first property from personal to an LLC. It cost about $800 with an attorney.

    2Reply
  • Will BarnardPro Member
    Moderator
    Developer 路 Santa Clarita, CA 路 Member since 2008 路 15k+ posts 路 10k+ votes
    4y

    All of my holds have always been held in an LLC and all my flips done through an S Corp. That is not to say that a certain person's situation may differ so always check with your CPA first as they are the experts.

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  • John Duston
    Accountant 路 Santa Barbara, CA 路 Member since 2016 路 213 posts 路 66 votes
    4y

    Typically, yes. LLCs are a tool for liability protection that we often use.

    1Reply
  • Wale LawalBusiness Member
    Real Estate Broker 路 Houston | Dallas | Austin, TX 路 Member since 2018 路 5k+ posts 路 2k+ votes
    4y

    @Cristin Rakestraw , creating an LLC for your rental property is a smart choice as a property owner. I will suggest also suggest you do some research then go from there.

    Goodluck and make it happen!

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  • Will BarnardPro Member
    Moderator
    Developer 路 Santa Clarita, CA 路 Member since 2008 路 15k+ posts 路 10k+ votes
    4y
    Originally posted by @John Duston:

    Typically, yes. LLCs are a tool for liability protection that we often use.

    AND, don't forget to consult with your insurance broker too to ensure you get the proper insurance coverage as well. That is wall of defense 1, LLC is wall 2.

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  • John Duston
    Accountant 路 Santa Barbara, CA 路 Member since 2016 路 213 posts 路 66 votes
    4y

    @Will Barnard

    Exactly. I often advise clients to get professional advisors as line 1.5

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  • Will BarnardPro Member
    Moderator
    Developer 路 Santa Clarita, CA 路 Member since 2008 路 15k+ posts 路 10k+ votes
    4y
    Originally posted by @John Duston:

    @Will Barnard

    Exactly. I often advise clients to get professional advisors as line 1.5

     Good point John, that is probably line of defense 1 in front of my 2 walls mentioned above! Excellent advice.

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  • Destry B.
    Rental Property Investor 路 Twin Cities, MN 路 Member since 2021 路 8 posts 路 6 votes
    4y

    What financing will allow title to be held in LLC?

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  • Chris MullinaxBusiness Member
    OP
    Property Manager 路 Kokomo, IN 路 Member since 2020 路 172 posts 路 44 votes
    4y

    Thanks for sharing your experience, @Benjamin Aaker!

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  • Chris MullinaxBusiness Member
    OP
    Property Manager 路 Kokomo, IN 路 Member since 2020 路 172 posts 路 44 votes
    4y

    Thanks for your reply @Wale Lawal!

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  • Chris MullinaxBusiness Member
    OP
    Property Manager 路 Kokomo, IN 路 Member since 2020 路 172 posts 路 44 votes
    4y
    Originally posted by @John Duston:

    @Will Barnard

    Exactly. I often advise clients to get professional advisors as line 1.5

    馃檶

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  • Thomas Kwan
    Investor 路 Sunnyvale, CA 路 Member since 2014 路 55 posts 路 9 votes
    4y

    Interested to learn how do you get a mortgage for an LLC-owned rental? Commerical loan?

    0Reply
  • Benjamin AakerPro Member
    Rental Property Investor 路 Brandon, SD 路 Member since 2015 路 1k+ posts 路 1k+ votes
    4y

    @Thomas Kwan: You will go to a commercial banker, just ask to speak with one at your local bank. You will be getting a commercial loan. Terms will be less favorable as the limited liability protects you but makes it more risky for the bank. 

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