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Updated about 9 years ago on . Most recent reply

User Stats

149
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41
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Nicole Wood
  • Investor
  • Bath, NY
41
Votes |
149
Posts

Is an LLC a good idea?

Nicole Wood
  • Investor
  • Bath, NY
Posted

I am thinking of forming an LLC. My sister and I are trying to get into REI. We want to do small rentals (multifamily homes) and flipping as well. We are in upsate New York. I am hoping an LLC will help with loans. My credit is 649 and hers is poor. Apparently I have a high DTI ratio due to having a care loan and a home loan that are pretty new. We have found two deals we are looking into and want to get started but have yet to secure financing for deals. Will an LLC help with that? Is there another type of business we should form such as a corporation, etc? I know where I want to go with this business but getting my foot in the door is proving difficult.

Most Popular Reply

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1,638
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1,060
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Cal C.
  • Investor
  • Peachtree Corners, GA
1,060
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1,638
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Cal C.
  • Investor
  • Peachtree Corners, GA
Replied

For you a LLC is a waste of money. Until you have a considerable amount of properties and equity in those properties a LLC is not needed. If you are wanting it for asset protection reasons an umbrella insurance policy would likely be much better and cheaper.

For credit purposes, it will take a while (years at least) to pay enough bills out of your LLC to not have to have a personal guarantee on loans. I've had an llc for ten years and lenders don't even bother checking the LLC's credit history they only want mine.

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