LLC for Investment Property

[Connie Tang]

Hello!

I am a newbie investor, just getting into the game (scared sh*tless).

I need some advice about whether or not to create an LLC for my investment property purchase. I've heard from several people that you should put it in an LLC for personal protection purposes, but also that it offers many tax advantages, but then I've also read online that an LLC has more downsides than benefits if you are a first-time investor, so it is not worthwhile. I am honestly a bit overwhelmed by all of this, so I am seeking any insights that anyone can offer here on BiggerPockets. Secondly, if going with the LLC ends up being the correct path for me, would I register that in my home state or the state the investment property is in (I live in MA and I am shopping in RI).

Thank you!

[Rumen Mladenov]

@Jeff 

@Jeff Rogers The idea that after 10 properties you should create an LLC probably has to do with the maximum number of financed properties one can have in order to qualify for a conventional mortgage - happens to be 10. Many banks would make commercial loans to LLCs only; I did not want to set one up because of the paperwork hassle (who wants to do another tax return and have to keep track of filing deadlines), so I found a credit union that would do commercial loans to sole proprietors.