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Updated 3 months ago on . Most recent reply
Purchase under an LLC or not?
Hello, I'm hoping to buy my first property next year, and am wondering if I should create an LLC to do so. The reason is I want to separate my personal debt to income ratio from my real estate investing "business" and of course reduce personal risk. Is complete separation even possible? Thanks!
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- Philadelphia
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- Philadelphia
Charlie - If you start an LLC as a single-member LLC the profits and losses will flow through your personal income tax return without filing a business tax return. If you have two or more members of the LLC you'll file a business return and then have those financial flow over to your personal return via K-1. "Separation" may not be possible, but I'd like to think of an LLC as an "extra layer" of protection, although you're not completely isolated from risk... just makes it harder for others. Good Luck!