Business Bank Account w/o LLC?

Question

Just completed Craig Curelop’s book on House Hacking (great read) and I’m wondering how I keep my finances separate with a business account without having an LLC or Articles Of Incorporation? First house hack and just obtained pre-approval

Bjorn Ahlblad · Answer

@Kyle Holmes I have properties in my name and others in LLC's. I keep business records and money separate from personal. Your monicker says you are an attorney. You know the ins and outs. Just make sure you have adequate liability insurance whatever you decide. And to answer your question; if you first property is not serious MF I would have it in my name if nothing else the money and qualification is easier and cheaper.

Ramon Flores · Answer

@Kyle Holmes It depends on your situation and how you are financing the deals. If you are using conventional financing, then an LLC won't help because you have to show the bank how much money you have made in the past few years and how much you are currently making. A new LLC will have no income.

However if you are using hard money, or a portfolio lender, they may not care about your income and may focus on the deal itself. For this an LLC may work, it really depends on your approach.

Ramon Flores · Answer

@Kyle Holmes If you are using an FHA loan, then you will be using your W2's and past tax returns, not a new LLC. If you are concerned about liability then get umbrella insurance on top of your regular insurance. It is not very expensive and it will protect you.

Bjorn Ahlblad · Answer

@Kyle Holmes Just open another bank account in your name and get another CC. All the best!

Brandon Ross · Answer

You can use your own SSN and select sole proprietor as the business type to apply for a small business credit card. I highly recommend applying for the Chase Ink Business Preferred as right now the bonus is 100,000 points and they are some of the most versatile and valuable points in the travel hacking game. House hacking and travel hacking make a beautiful and profitable companion.

Alex Khan · Answer

A trust.

Kyle Holmes · Answer

@Ramon Flores Awesome. Umbrella insurance thanks for the helpful advice

Kyle Holmes · Answer

@Ramon Flores Would be using an FHA loan

Kyle Holmes · Answer

@Bjorn Ahlblad awesome thanks again. I feel the same. My first MF will likely be only a duplex and with the first year income I didn’t think I’d enjoy all of the benefits an LLC has to offer. Will be sure to get liability!

Kyle Holmes · Answer

@Erik Hatch Just seems like I have a single property instead of a REI business

Business Bank Account w/o LLC?

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