Did you create an LLC when you began aquiring properties ?

[Collin Rush]

Hey guys.

I'm relatively new to real estate investing and have wondered the benefits of creating an LLC before I start. I am reluctant to taking out addition mortgages in my own name which is why creating an LLC is appealing.

How do you guys run your businesses?

[David M.]

@Collin Rush

There are a bunch of threads on this. In general, bottom line it's better to use your personal name when doing long term rentals of something lower value like single family homes. LLC is only for asset protection. You can mitigate the risks with additional insurance through an umbrella policy

Meanwhile, owning the property under your own name allows you to tap into better rates in conforming loans, being able to go to court yourself (assuming you choose to) just to name a couple for example

Getting a loan under a LLC will still require you to personally guarantee it, and it will be a commercial loan. As for the court thing, since the LLC is a legal state entity, you can't represent it (unless you are an attorney yourself) even if you are the sole member.

If you are doing investments other than single family homes, it might be beneficial to go through the expense and hassle (you need separate bank account and not co-mingle your funds) if a LLC. For example, a medium or large apartment complex or a commercial strip mall. Maybe if you are doing flipping..

I hope this helps. Search the forums. You’ll find the other discussion threads. Good luck