House Hacking Leasing Contracts

[Eric Hipolito]

I'm planning to buy my 2nd property in my name to decrease my down payment (3.5-5%, FHA or Conventional) and plan on house hacking. My question is, would it be better for my roommates to pay me directly or should I start an LLC and treat it like a business from the beginning. I want to cover my assets, but also prevent any awkwardness that might arise from being both a roommate and landlord at the same time.

Follow up question, what would a good exit strategy be for when I move out it 1-2 years when I try to rinse and repeat the process.

All insight greatly appreciated!

[Eric Hipolito]

Thanks so much Vitaliy. This really solidifies some of my cross-research

1. Best FHA/Conventional loans need to be purchased by the individual, not the LLC

2. Avoid the "due on sale" clause when transferring from individual to LLC. It keep be determined as fraud.

3. Keep the LLC (lease, insurance, rents, bank acct, etc.) and the individual SEPERATED for the most protection an LLC can provide and avoid 'piercing the corporate veil'.

4. Have a good lease agreement in writing

I appreciate you taking the time to answer my question!