Purchasing and an LLC

[Jen Teske]

I have an LLC for my real estate business (I am an agent - no investing yet). I am getting ready to move forward with purchasing a duplex for investment purposes. Should I purchase the business under my current LLC, and then create an LLC for that specific property? Or should I go ahead and create the LLC for the property and purchase under that LLC. I do have other significant assets I want to protect, so I know I want to go the LLC direction. Just not sure how I should make the initial purchase.

[Steve Vaughan]

I don't hold little residential properties in LLCs, but I would definitely and do have different entities for different business purposes.  As an agent, or flipper or wholesaler or operator, the income is 'active'.  Rental property is 'passive' (lol - according to the IRS anyway).  Don't mix active and passive income within any entity!