Rental Property (Asset Protection)

[Alonzo Garza]

Hello fellow BP community,

1. Is it fine if I obtain a rental property under my own name and then at a later date shelter that under an LLC or INC. structure?
   1. Or is it better to get it under the LLC or INC. from the very beginning?

Thanks in advance for any advice!

-Alonzo

[Curtis Bidwell]

@Alonzo Garza 

This really depends on what kind of property you are using and how you hold title to it. If you are using financing, most lenders will not lend to an LLC for 1-4 units. On the other hand, they may REQUIRE you to put it in an LLC if it is commercial.

If you want to make a change at some later date to/from an LLC you will have to re-title the property and that may trigger a due-on-sale clause from your lender.

Many of us simply carry a large umbrella policy ($1-2 million) to cover our liability, and do things lawfully and ethically to avoid legal conflicts the best we can!