How to you structure your REI business/es?

[Bryan Cavellier]

Generally question when looking to protect yourself (personal liability) from your investments (Rentals). Share your experiences or things you do. Do you have a holding company? S or C Corp? Just an LLC?

I am also curious about expenses, reserves, and the financial side of your business. Each property has a checking account for your reserves, repairs, capex, etc. Do you just invest in a good CPA? How many properties do you need for a CPA to be worth it?

Curious on everyone experiences good or bad and general input, thanks BP!

Context on my journey: Currently house hacking a duplex with an FHA loan and looking into my next house hack in the next 6 months and want to make sure I am setting my self up for success on the business side of investing. I believe I analyze deals well and know what I want on the buying and management side of REI but could LEARN ALOT on the business structure side, the tax side, and the accounting side of REI.

[Kenneth Garrett]

@Bryan Cavellier

To protect yourself from your rental properties a LLC is the proper entity method. On BP here you will have very passionate thoughts on just insuring it versus an LLC. It's two different philosophies. An important aspect of owning it in an LLC, it will require commercial financing. This financing has higher interest rates, but there is no limit and you don't have to worry about DTI. One option is to buy it in your name and transfer it to a LLC afterwards. The negative with that is a lender could call the note due as the ownership has changed. This is very unlikely, but I know someone that had it happen to them. Talk to a CPA to find out the advantages of a rental business. There are many deductions you can take advantage of. Even if you only own one property you can still have the conversation for the future.