Advice with LLC on upcoming rental property

[Christian Ferreira]

Hello Everyone,

This is my first post, sorry in advance if this question already exists and I failed to due sufficient research before asking. I do believe my situation could be a little bit different than others and that is why I am asking for advice from some of the best real estate investors in the industry.

This is my current status, I am buying an investment rental property and closing in about 30 days. The property costs 90k and we are putting 20% down using a conventional loan. This will be my fiance and I's second property together, we also purchased a foreclosure last year that we currently live in. After doing some minor repairs and renovations we did a cash out refinance, pulling 35k and having the new appraisal value at approximately 230k. I have about 50k in the stock market from investing with extra deployment money I had received while in the military. I plan on eventually refinancing this multifamily investment property and doing the BRRRR method on a couple other investment rental properties. We are currently buying the house in our names, I have read that a LLC is hands down the way to go but it may not be worth it one your first property. In my case I still have a home that I live in plus about 70k in assets. This could be irrelevant but we plan on renting to the college student niche, because of the location. The questions I have are the following:

1. Should I open an LLC. (I think I know the answer)

2. Will transferring the investment property into the LLC be difficult? I know about the possible "due on sale" clause that I could face, but what are your expert opinions?

3. A house flipping friend who uses hard money loans told me that in Massachusetts it will cost an annual fee of $500. He recommended I look into opening a LLC in the state of Wyoming because of the law they have and their annual fee of only $50. Does anyone have any advice on this topic?

4. Is cash out refinancing a property you have in a LLC to use money on your next investment going to cause issues?

Any advice on any of the questions would be greatly appreciated.

Thank you,

Christian Ferreira