When should I create an LLC

[Jim Crogan]

Hello all, I am just staring out and trying to educate myself on real estate investing and some of the great tax advantages that come with it. My question is should I create an LLC before I acquire my first property? So far it looks like Nevada or Wyoming. Thanks

[Steve Vaughan]

Hi @Jim Crogan.

For me it depends mostly on property type. A little house or residential 4 or less unit? Nah. Too difficult to leverage and insure. Check out all the threads: "I can't get a loan for my LLC!" "Commercial rates and terms suck!" It's just a house. What do I do????

Also depends how high the fees are to have an LLC.

CA has the highest LLC fees in the country! $800 per year I think. Foreign or not they get ya. Then there's the state dept of rev reporting and IRS tax filings for no tax benefit at all unless you are establishing a sweet & sophisticated retirement plan or something.

My $.02 to you!