LLCs and personal mortgages

[Jared Ryan]

Hello BiggerPockets!

I'm exploring the possibility of getting a 10-unit apartment building. With that in mind, I'm wondering if I should get an LLC.

Benefits of LLC:

1. If I live in the property, I, Jared, can rent from my LLC, and that provides come interesting tax advantages. Though I got lost in the weeds here, I couldn't quite figure out how advantageous that would be.

Could someone please provide more insight on this?

2. Liability protection. Well, sort of. Everywhere I read says just go for good insurance, at least for newer investors. Maybe when the portfolio gets larger, or if I were branch into other areas of real estate, it would make sense (wholesaling, agent, flip, etc.).
3. If I want to go buy more real estate, the commercial loan and LLC don't show up on my personal credit.

That's pretty nice if I want to go buy future 1-4 unit properties. However, I've read that the commercial loan / LLC is still something I need to disclose as I try to get funding for my next property. So, does the LLC actually benefit me at all, when it comes to seeking future loans? If the lending institution knows about the commercial loan / LLC after all, it seems like I would probably qualify for the same mortgage amount that they would lend to me without an LLC, but just perhaps I would get a better rate with having the commercial loan in the LLC because I would have better credit.

The reason I ask is because I have not yet utilized the oh-so-beautiful FHA loan, so after I use my full borrowing capacity on the commercial property, I'd probably try to buy up the most expensive 4 unit or smaller that the bank will let me purchase, and knowing how LLCs impact my personal borrowing ability will help me gauge how much I should be able to borrow for the FHA loan. And if I should get the LLC at all.

Cons of LLC:

- It costs time and money to set up and maintain, and it costs different in each state. So...to know if I should get one, I should just make sure the benefits outweigh the cons.

Are there any other pros/cons I'm missing here?

Thanks in advance!
Jared Ryan