All Forum Posts by: Mark Lewis

Welcome to Bigger Pockets and to Real Estate Investing! 

For investors just starting out, I always recommend that you consider the risk you are taking on and how to manage and mitigate it with an asset protection plan. Real estate investing is an inherently risky area to navigate in terms of liability, and you want to make sure that risk is mitigated wherever possible. If you want to grow and keep what you build in your portfolio, these considerations are essential.

With a small portfolio when you can handle less risk of loss, separating each property owned into an LLC to limit your personal liability and isolate one property from another is a good way to go. That way if a lawsuit due to some kind of accident on a property happens, any judgement is limited just to that LLC and that property rather than putting your personal assets and other properties at risk. As your portfolio and your risk tolerance grow, grouping properties in LLCs becomes more reasonable.

If you have an LLC structure set up ahead of time and you are making cash purchases, you have the added benefit of being able to close in an LLC and potentially have some anonymity of ownership. Certain states like Wyoming do not publish member info when an LLC is formed, so there is no public link to you as the owner. This can help dissuade lawsuits from starting.

Best of luck to you!