Business Structure for Long Term Rental Acquisition

[Jenna Mayeres]

Hi BP! Overthinking business structure when it comes to acquiring rental property. My husband and I started with:

A 2 unit FHA house hack (loan in his name) and stayed for full year as required

Then purchased a new primary with a 3% conventional loan (in my name) and we're currently forcing equity via remodel. (FHA 2 unit has 2.6% rate so we didn't want to refi)

Now under contract to purchase property number 3 which is a 4 unit building. Currently working with a local bank that's offering me a commercial loan with a 3 year ARM and is only requiring 15% down. Quadplex will need a cosmetic rehab and then will be fully rented and then refinanced.

My CPA suggested forming an LLC at this point.. but another trusted lender claims I should buy in my personal name to utilize my 10 Frannie/Freddie loans (small mult family) for lower rates and better cash flow and only use my LLC for property acquired via creative financing.. until later once I've maxed out what I can buy in my name. I see pros and cons of both of course. What would you do?