Starting an LLC to buy first property

[Jack Chastain]

Good morning,

I am currently working a 9-5 in property management and am wanting a way out. I am 22 and have been working in property management for close to 2 years now. I look at the people above me and what they have/do with their time and money, and I want to have that for myself. 99% of millionaires were created through real estate and I want to join that statistic. I have been reading and doing research more in depth for the last 5-6 months. I am brand new into the RE space, so any and all help is sincerely appreciated. I am looking to get into my first property and start house hacking. I am currently in an apartment that I work at. If I were to get a house, I would then be able to rent out my current apartment for an extra $3k a month. This will help significantly if I can get into a house. 1st question: Is it smart to house hack your first property as a single-family house? There isn't too much access to multi-family in my area.

Now to my title. Is it smart for me to open an LLC and buy my first property under the LLC? My buddy and I are wanting to get into RE investing together, so that is why we were thinking to start an LLC. I have been seeing a lot of mixed signals from other forums and social media on LLC's, so that is why I wanted to come here and ask those that are experienced.

Any and all advice is welcome and greatly appreciated. I can't wait to grow my network, to get that net worth. I hope you have a great day and God bless.

[Richard Elvin]

@Jack Chastain "Is it smart for me to open an LLC and buy my first property under the LLC?". Short, non lawyer, answer, NO. An LLC would require commercial financing, it is an added expense, and it's an added complication.

"I think that is the only thing holding me back is the limited capital on my end and that is why I am looking into using an LLC to gain access to outside lending.". The LLC will complicate lending, not "gain [you] access". Unless you are talking about hard money, most HML's will require an LLC. (It doesn't seem that you are looking at HMLs)

As @Hamp Lee III said, start with an OO house hack, lots of options for first time buyers. Some options even allow for down payment re-funding over time.

@Todd Jones made a really good point that it seems you're trying to start where the "people above" are, rather than starting where the "people above" started. Maybe offer to buy one of them lunch and ask how they started?

Read @Nathan Gesner's post at least two or three times. Then read it again.

Last point, "I am currently working a 9-5 in property management and am wanting a way out.".
Why are you looking at buying rentals if you want a way OUT of property management? Buying rentals is property management! Just something for you to think on.

I wish you the absolute best!