Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Starting Out
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated almost 6 years ago on . Most recent reply

User Stats

40
Posts
45
Votes
Andrew Varney
  • Huntington, WV
45
Votes |
40
Posts

I have an LLC, but how can I / should I use it?

Andrew Varney
  • Huntington, WV
Posted

Hello All,

After a long time watching and getting life in order, we're ready to start our investing journey. My wife and I are in Sarasota, FL. (a little South of Tampa). I see one of the most common questions from new investors (myself included), is if they should use an LLC or not. From what I've gathered, owning property in a Trust or an LLC with a clear separation of personal and business activity is one of the most secure options in regards to asset protection and liability, but it has a lot of challenges with getting traditional loans to acquire property.

My family has already started an LLC to do business, but after reviewing all of the information, I think we may start in our personal names with an Umbrella insurance plan for protection to make acquisitions easier at the start. I'm worried about using a quit claim deed into an LLC, but that may be an option in the future.

*If we own the property personally, is there any benefit or need to keep the LLC?

*Can the LLC be used to 'manage' the properties and start generating an established income source in the LLC?

*Are there any tax benefits to taking the money in through the LLC and dispersing it to us personally? Can you even do this if the property is owned personally?

*Any other advice from the community?

I'm curious if anyone has a use I'm not thinking of, otherwise I'll just close the LLC and not worry about the minor additional fees / tax preparation after this year.

One minor addition, currently my Brother- and Sister-in-law are in the LLC with my wife and I. We were planning on all going in together to invest, but they've decided to pull out and not jump in for now. I already have the forms to remove them from the LLC, and will do so before any 'business' would be conducted.

Should I keep it or kill it? I know none of your advice is official legal info, but am interested to hear your thoughts on what you'd do???

Thanks!

ASV

  • Andrew Varney
  • Most Popular Reply

    User Stats

    322
    Posts
    179
    Votes
    Sean Morrison
    • Attorney
    • Slidell, LA
    179
    Votes |
    322
    Posts
    Sean Morrison
    • Attorney
    • Slidell, LA
    Replied

    Lots of lenders will work with an LLC, but they'll probably require a personal guarantee as well. You'd have to do that anyway if you're buying it in your name. As for the family situation, it's probably cleaner to start a new LLC rather than risk messing up paperwork removing members.

    Loading replies...