To LLC or not to LLC? That is the question

[Account Closed]

Hello. I am a new investor and have not yet done any deals, but I am learning a tremendous amount on these forums and through the books introduced to me by this site and the members of it. There are still a few things I am not entirely clear about as I get closer and closer to my first deal, and one of those things is the question of LLC's. Is there a general consensus about which way is best, LLC or good liability insurance? I read something that seemed to indicate that if you had an LLC it could be more difficult to pay yourself, or have access to the cash flow? Is this generally true, and if so how do you work it out? Or do you work it out at all? Is an LLC for if you are going to invest and then re-invest the profits, and not realize cash-in-hand for awhile? Or am I misunderstanding something entirely? Any advice would be appreciated and I thank you in advance.

[James Wise]

Originally posted by @Account Closed:

Hello. I am a new investor and have not yet done any deals, but I am learning a tremendous amount on these forums and through the books introduced to me by this site and the members of it. There are still a few things I am not entirely clear about as I get closer and closer to my first deal, and one of those things is the question of LLC's. Is there a general consensus about which way is best, LLC or good liability insurance? I read something that seemed to indicate that if you had an LLC it could be more difficult to pay yourself, or have access to the cash flow? Is this generally true, and if so how do you work it out? Or do you work it out at all? Is an LLC for if you are going to invest and then re-invest the profits, and not realize cash-in-hand for awhile? Or am I misunderstanding something entirely? Any advice would be appreciated and I thank you in advance.

If you are paying cash I'd go LLC as there is essentially no downside to going LLC as opposed to your personal name. If you want to buy 1-4 unit properties & use 30 year residential loans than you need to buy them in your personal name to obtain the financing. Getting the financing on these has a bigger benefit than additional LLC protection provides so go personal name in this situation.