Purchase Under LLC or Personal Name? Larger Down Payment?

[Liz Weiss]

Hi Experienced STR investors! I just got an LLC setup and am currently debating starting my first STR in a downtown urban setting or something just outside of a bigger city. Besides deciding on the best location for my first project, I am wondering if using my LLC is a good move, or if buying a property personally is better? With so many tight regulations in the cities, I'm wondering if my LLC would raise a red flag on my STR listing or when buying the home. ALSO if anyone has advice regarding a down payment, I'd appreciate it. I have the cash to put 50% or more down on a nice property, but is that necessary in an urban area? It seems like I'd have to put at least that much down to get a positive cash flow in a big city. Thanks for any input!

[Steve Vaughan]

The biggest decider for me whether to own in an LLC or personally is asset type.

For little houses (or up to 4-plex, residential property) with debt, I own personally and carry good insurance.  Too hard to finance/ will get crummy commercial rates and terms inside an entity.

Commercial property like 5+ unit apt bldgs, I own in LLCs.  

Lastly, with residential mortgages, I like to put 20% down vs 50%. Just enough to not have PMI. If you have to put 50% down just to cash-flow, I would invest in something else completely, like a REIT. Just my $.02 @Liz Weiss