Personal Name or LLC: Which is Better for First-Time Homebuyers?

Personal Name or LLC: Which is Better for First-Time Homebuyers?

Member since 2021 · 6 posts · 0 votes

As a soon-to-be first-time homebuyer, I'm facing a dilemma. I am looking to purchase a double and house-hack. Should I purchase the property in my name or set up an LLC as I look to start my journey in real estate investing? Does this effect the loan I am able to receive? I'd love to hear your thoughts on this matter! Any insights or personal experiences you can share would be greatly appreciated. Are there any key factors I should consider?

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Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
3y

Owner occupied government backed loans don't let you buy in a LLC. Don't waste your money on the seminar, book, LLC filing fees for your first time buyer deal.

Go hunt for down payment assistance. Get your FICO score up. MAximize your income and liquid assets... instead

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  • Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    3y

    Owner occupied government backed loans don't let you buy in a LLC. Don't waste your money on the seminar, book, LLC filing fees for your first time buyer deal.

    Go hunt for down payment assistance. Get your FICO score up. MAximize your income and liquid assets... instead

  • Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    3y

    By double do you mean duplex? Your name would be the easiest. If you plan to use the low money down payment options you won't get that with an LLC. Out the gate you don't really need an LLC. Focus on finding a house hack and make sure to connect with a lender.

  • Phil AveryPro Member
    Investor · Houston, TX · Member since 2023 · 79 posts · 47 votes
    3y

    I believe it will be a lot easier to purchase under your name if you're just starting out. As mentioned above, owner occupied government backed loans don't let you buy in a LLC. Not to mention the main reason for doing this is to protect your assets as they grow. With 1-2 properties I don't think its worth the effort just yet. 

  • Scott JohnsonBusiness Member
    Specialist · Greenville, NC · Member since 2019 · 673 posts · 408 votes
    3y
    Quote from @Kyle Wojciechowski:

    As a soon-to-be first-time homebuyer, I'm facing a dilemma. I am looking to purchase a double and house-hack. Should I purchase the property in my name or set up an LLC as I look to start my journey in real estate investing? Does this effect the loan I am able to receive? I'd love to hear your thoughts on this matter! Any insights or personal experiences you can share would be greatly appreciated. Are there any key factors I should consider?


     I'd personally keep it simple and just buy in your own name. What I recommend, and what most people don't do, is that you read the IRS Publications related to Residential Rental Property at a minimum. 

    People talk about the advantages of real estate all the time and not where to find them. This is where you find them. 

  • Kyle WojciechowskiPro Member
    OP
    Member since 2021 · 6 posts · 0 votes
    3y

    Thank you all! Appreciate your insights.

  • Kyle WojciechowskiPro Member
    OP
    Member since 2021 · 6 posts · 0 votes
    3y
    Quote from @Phil Avery:

    I believe it will be a lot easier to purchase under your name if you're just starting out. As mentioned above, owner occupied government backed loans don't let you buy in a LLC. Not to mention the main reason for doing this is to protect your assets as they grow. With 1-2 properties I don't think its worth the effort just yet. 


     Thanks Phil!

  • Kyle WojciechowskiPro Member
    OP
    Member since 2021 · 6 posts · 0 votes
    3y
    Quote from @Scott Johnson:
    Quote from @Kyle Wojciechowski:

    As a soon-to-be first-time homebuyer, I'm facing a dilemma. I am looking to purchase a double and house-hack. Should I purchase the property in my name or set up an LLC as I look to start my journey in real estate investing? Does this effect the loan I am able to receive? I'd love to hear your thoughts on this matter! Any insights or personal experiences you can share would be greatly appreciated. Are there any key factors I should consider?


     I'd personally keep it simple and just buy in your own name. What I recommend, and what most people don't do, is that you read the IRS Publications related to Residential Rental Property at a minimum. 

    People talk about the advantages of real estate all the time and not where to find them. This is where you find them. 


     Appreciate it, Scott!

  • Kyle WojciechowskiPro Member
    OP
    Member since 2021 · 6 posts · 0 votes
    3y
    Quote from @Caleb Brown:

    By double do you mean duplex? Your name would be the easiest. If you plan to use the low money down payment options you won't get that with an LLC. Out the gate you don't really need an LLC. Focus on finding a house hack and make sure to connect with a lender.


     Yes a duplex - thanks Caleb!

  • Kyle WojciechowskiPro Member
    OP
    Member since 2021 · 6 posts · 0 votes
    3y
    Quote from @Caroline Gerardo:

    Owner occupied government backed loans don't let you buy in a LLC. Don't waste your money on the seminar, book, LLC filing fees for your first time buyer deal.

    Go hunt for down payment assistance. Get your FICO score up. MAximize your income and liquid assets... instead


     Makes sense - thanks Caroline!

  • Scott JohnsonBusiness Member
    Specialist · Greenville, NC · Member since 2019 · 673 posts · 408 votes
    3y
    Quote from @Caroline Gerardo:

    Owner occupied government backed loans don't let you buy in a LLC. Don't waste your money on the seminar, book, LLC filing fees for your first time buyer deal.

    Go hunt for down payment assistance. Get your FICO score up. MAximize your income and liquid assets... instead


     100% Agree

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