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Updated over 8 years ago,
Cannot buy a duplex in an LLC
I wanted to create an LLC and have the entity purchase a duplex in order to protect our personal assets from a potential settlement-hungry tenant. We found that no lender will structure a deal where an LLC buys the duplex even if you personally guarantee it. The reason is the lender needs to bundle the loans to sell to other investors and they can't bundle a mortgage from an LLC. If we bought a bigger property (more than 5 units) that would not be an issue.
Other than screening tenants really well and making sure you have a solid lease, having homeowners insurance and of course keeping your property safe, how do you protect yourself from liability?