I am considering getting into house flipping. The house hacking method will probably be the most attractive for me. However many people recommend getting an LLC when flipping. Here is my question can I buy a home as a primary residence with an LLC and should I. Or is it best just to buy as an individual if I plan on living in the house I want to flip.
When purchasing a home via an LLC there are a few things you need to consider:
- if not paying all cash, it will require a commercial loan which right now typically is 20-30% down, amortized @ 20 yrs on a 5 yr ARM, typically higher rate than traditional
- homestead tax emption for property tax savings...I don't think you can do this for an LLC
Since you're hacking and flipping, I recommend using your personal if its a single family residence. If it's a small multi, same recommendation but add on an umbrella insurance policy.
When you get to the point you're doing multiple in a month, then obviously you're not hacking and just flipping, may make sense to purchase under LLC since its a short term hold.
Other people here are much more educated on this but I’ll give it a shot. The whole point of house hacking is getting a very low downpayment. In order to qualify for those you have to “plan to live in the house for a year” and you have to purchase in your own name. If you’re planning on flipping, staying for a year goes against conventional wisdom.
Thanks guys, that helps clarify things!