Filing and LLC Starting out

[Account Closed]

Should you file and LLC before making your first investment or should this be done after purchasing a few rental homes?

[Joseph B. Davisson]

I've posted on this topic many times and as an investor and attorney, my opinion is generally to wait unless the property is over $500k or a commercial property which could havce environmental issues. It is best to seek the advice of counsel who should inquire about your other personal and financial matters. One LLC for a single residential rental is silly. I see too many new investors who spend time and money setting up entities they aren't equipped to operate properly. Use the money to buy good insurance and build up a small portfolio. In the meantime, study entities and talk to your cpa. My opinion is there are too many people out there selling investors on filing and forming unnecessary entities. Don't get caught up in the "build it and they will come" mentality.