Buying house with FHA loan and putting it under a business

[Curtis Crawley]

Hello everybody BP, Starting out soon on my investment in real estate in center to upper New Jersey. Weird question and there may already be a post for this but was wondering can I start a business and get an fha loan and put the house under the business? Sort of confused on how people transfer a house to their business or get started. Thanks.

[Jay Dean]

@Curtis Crawley - I am not sure what you are trying to achieve by moving the home to the LLC. I assume you are primarily interested in asset protection. Generally, when just starting out it isn't necessary to have an LLC right away since most people just starting out don't have much in the way of assets to protect. Remember, a rental home isn't really much of an asset if you still have 29 years of payments to make on it.

Your other reason for having the LLC might be for keeping business and personal books separately. If so, you can always use your LLC as a property management company so that all the money flows through your LLC. Remember to pass all legitimate business expenses through the LLC. Mileage, computers, supplies, business meals, etc that are for business purposes.

When your LLC spends one dollar it has the buying power of about 1.3 dollars since you are spending pre-tax money. The typical person pays around 30% in taxes.

Consult with a Tax Advisor if you haven't already done so.