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Updated over 7 years ago on . Most recent reply

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Seth Maynard
  • Cheshire, CT
6
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To LLC or not to LLC, that is the question:

Seth Maynard
  • Cheshire, CT
Posted
Good morning all - looking to get feedback on whether a new investor should establish an LLC early on and quick deed properties post closing or just keep things under their name(s)? It's the direction I'm looking to go, but have gotten conflicting feedback. To my mind it's a layer of separation between us and the tenants, and would allow for cleaner financials. Additionally, I believe banks requires 24 month history to write loans to a business, so why not get that started early? Thanks for any insights.

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Tom Gimer
  • DMV
3,417
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Tom Gimer
  • DMV
Replied

If your plan is to operate your real estate business as an entity and eventually want to borrow in the name of the LLC (even though each member may be required to personally guarantee loans, at least initially) then it makes perfect sense to create the LLC now and adhere to all the formalities.

Most of the BP comments about "you don't need an LLC" are to new investors who think they need an LLC to get started in REI... which you most certainly do not.

  • Tom Gimer
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Eastern Title & Settlement
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