Financial Advisor · New York, NY · Member since 2020 · 5 posts · 4 votes
I would like to know the best way to set up LLC's for the purchases. Does it make sense to open a Nevada or Delaware corporation? What are the best steps when one is ready to buy a property to preserve anonymity, keep personal and investment assets separate while also setting it up correctly for a long term hold?
Additionally, given where rates are today, would it be correct in assuming that it would be best to put down as little as possible so as to maximize cash on hand vs lending value?
Multifamily investor · Boston, MA · Member since 2017 · 281 posts · 521 votes
6y
I prefer Wyoming actually. Full anonymity, low fees, and you can do it online within a day with services like wyomingregistrars.com. Their laws are also very protective. Delaware is more expensive. If you want to maximize anonymity, set up a company with a name that is not related to yours, and mark it as manager -managed company (and not as owner-managed company). Nobody will have access to the information about the company's owners.
When you put as little as possible, it means that you are over-leveraging, which I don't recommend. A healthy LTV (loan-to-value) is no more than 80%. You want to keep enough gap between your net income and debt payments. When debt payments are high, you are at a riskier position (which is in part what happened in 2008).