Updated over 8 years ago on . Most recent reply
Forming an LLC before I begin?
Hi BP family! I am just starting out and put my first offer in on a condo that needs minimal to moderate rehab in my hometown of Marlton, NJ. I am planning on house-hacking it for about a year before hopefully moving on and renting it out completely. It is a 2 bedroom / 2 full bathroom condo.
Anyway, considering I am new to this, I was wondering if forming an LLC would be necessary or recommended before I dive into real estate investing, both from a tax and liability standpoint.
Hoping to hear the pros and cons to an LLC, S-Corp, or an umbrella policy, along with any other suggestions you may have. Thanks all!
Most Popular Reply
Not necessary. You're buying a primary residence until you put it into service. And getting an LLC will prevent you from buying it with a non-commercial loan (FHA, Conventional).
LLCs are pass-thrus for tax purposes. Speak with an accountant, but it won't save you on any taxes and you'll also have to pay fees for the LLCs.
Down the road you might need to go the LLC route, but right now you probably don't.