1st house to BRRRR. Should I put it under LLC or personal name?

[Mitul Patel]

I am in the process of buying the first property cash.

For obvious reasons it makes sense to hold it under an LLC, But will that make it complicated if I go to cash out refinance it? TIA

[Laura George]

@Mitul Patel

Most investors don't have a lot of assets or net worth when they buy their first rental. When that's the case there is really no reason to form an entity for corporate protection. The only thing people without assets have to lose is their credit or freedom. Just don't do anything immoral, unethical, or illegal. A good liability policy is a must. But umbrellas maybe or maybe not depending upon your unique situation. Corporate protection can be penetrated by good lawyers for many reasons. One of them is the co-mingling of funds between personal and business accounts and other various accounting measures. LLCs can be a lawsuit deterrent but only because of ignorance of the law. I really don't like the way some cpas and lawyers try to sell entities as products to create more business for themselves. You don't have to have an LLC to get started. You may fail and decide that real estate investing isn't for you. If so you will have to pay a lawyer to dissolve the entity. I'm Not a lawyer just an investor. I encourage you to do a lot of research before creating an entity. You'll want to be sure to create the best entity for you. I would recommend talking to more than one lawyer and cpa.