First BRR Deal Question on Personal or LLC

[Kyle Williams]

Hi all! I have been following the Forums and really appreciate all of the insight shared here. This is my first post. I am looking at buying my first single-family residential property for a BRRRR. Since it is my first property, is it best to just do it from my personal or is it best to form an LLC prior? I don't plan on scaling quickly or anything and I probably wouldn't look at another property for a while depending on how this one goes. This one just happened to be in a small town I grew up in and I found out about it. If the answer is personal account, what all steps need to be taken for protecting personal liability?

Thanks in advance for any guidance! 

[Jason Zundel]

I would most definitely encourage you to do so through an LLC rather than yourself personally. I know, shocking that an attorney would push for more paperwork, but it really is by far the safest route. Especially as you are knew to the process from the sounds of things this will help ensure that if you do run into problems, if there are damages, if liability arises, etc. then the liability will be corralled and stay within the bounds of the LLC and not affect the rest of your life and personal assets. Now, in order for the LLC to really provide protection you want a good operating agreement, proper paperwork (deed in the name of the LLC, contracts naming LLC, etc.), and to maintain the corporate veil (i.e. open a bank account for the LLC and business expenses go through there and not your personal bank account). You can certainly move money from your personal account to the LLC bank account, that's a contribution and acceptable - just don't buy rehab supplies from your personal account or your kids clothes from the LLC account.

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.