Investing Goals, am I making sense?

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I have an LLC for our partnership but again having a large umbrella policy will also help protect you.

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I do not have an LLC yet, but probably should. I own 3 SFR, (technically 4 1/2), I just haven't transferred one over to my son yet and the other is half owned by a partner who is living in it. This does leave me pretty open, and I am not happy with it.

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Wow, thank you everyone for replying so quickly! It sounds like to get a conventional loan it would need to be in my name. I was just worried if I ever got sued, but perhaps a larger ins. policy would be money well spent. CT does have very high taxes, and property in my area is very expensive. Flipping houses sounds really good, but the small steady stream of cash appeals to me even more. Brianna, thanks for your story, that is my goal, to fix things once and properly to avoid constant calls for maintenance. In the 17 non-residential units I take care of, I probably spend less than 2 hours a months with issues.

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If you go the route of not having an LLC and you get sued, than all of your personal assets are in jeopardy. In a lawsuit, They can not go after your personal assets or your other businesses when your property is purchased under your LLC. Forming an LLC now, minimizes risk and will not only offer you the financial protection of only impacting your properties under the LLC, it will also give you tax breaks for everything you purchase under the LLC. It will give you the opportunity to build your business credit. Which can later be used to purchase homes. You don't have to get a loan from a traditional bank, there are private money lenders willing to give loans to investors. Especially investors with proven track records of success. Private money lenders want to know that the numbers on your deal makes sense, and that you will be successful in your venture. You can find them on this website, or by doing a Google search for other investor websites, than looking them up. Both forming an LLC, and not forming an LLC have pluses and minuses to them. It just depends on what strategy you want to implement for wealth development.

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I own my first rentals in my own name. If you're worried about liability just make sure to have a large umbrella policy. That's how I've been advised. We have been able to lock in 30 year loans at 4.85% with 25% down. That makes for great cash flow

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You also may want to check out a few other potential costs (code compliance, insurance, property/income tax consequences), as well as doing some reading/research on landlord-tenant law, just so you know exactly what you're getting into. While I have no experience with industrial/commercial leases, I am pretty certain that the laws are VERY different, and state specific. As for your strategy, I agre that loong-term rentals are a solid way to go, as long as you buy right and know all your costs. Connecticut has some of the highest property taxes in the nation, which will take a sizeable chunk of your cash-flow. Good luck with whatever you choose!

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Agreed, you cannot get conventional financing with a LLC. We are buy and hold investors. We bought our first 3 flat fully renovated with a FHA and 3.5% down. Lived in 1 and rented out the other 2. Then we bought another renovated 3 flat and rented it out. Then we bought another and moved out of the original and into the new one. Because we bought already renovated building the time it takes to manage them are minimal. We mow the lawns once a month in summer. Outside of that we get a repair call probably once every 3 months (total across all units) so I would say on average we spend 2 hours a month managing the 6 units

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@Andy Collins great points. My understanding was that an investor might be putting themselves at a financial risk by not incorporating; for example if there was a lawsuit of some sort. Is that the case?

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Start an LLC? No. The LLC may be able to get a loan, but will still need 20% or more down. And will only get shorter term (15-20 year max), balloon, or ARM financing. If you're looking for 30 year fixed rate financing you will have to do that in your own name and will likely need 20% down. Creating the LLC is just a distraction. If you want to own rentals, get things in line to buy one. Rentals create a small, but long term income stream. "Passive" is a misconception, but they're really not a ton of work. Fix and flips create much larger paydays. Or, can if you do it right. But they require a lot more work. Rentals are an investment. Fix and flips are a job. Both do require money.

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you can't get a traditional mortgage (30 year low interest, etc) in a LLC,,,only individuals qualify for conforming mortgages,,,you can have up to 10 mortgages including your own home,,so slowly add a house here and there until you get to the 10 limit,,if done properly you can build cash flow up that will be flowing in and increasing with time and more properties. After you hit the 10 limit you will need commercial financing,,thats when the LLC will be needed,,,others will say form an LLC and put your rentals in them now,,but by doing so you are losing out on locking in the low rates we have now