Do people do this with their first house hack?

[Kenny Banuelos]

Is it a good idea to form an LLC to buy your first house hack?
If so what are the advantages and disadvantages?

What are some things that you can write off?

Any feedback helps, Thank you BP fam!! 

[Chandler Kinsinger]

Hey Kenny, here's some information that might help answer your question. House Hacking can be broken down into three distinct phases: when buying, while living there, and after moving out. The protections you'll need and the benefits of owning real estate in your own name will differ during these phases. Putting your property into an LLC too early can leave money on the table. On the flip side, keeping your house hack in your name as you build your house hack stack can open you up to liability after you move out. Forming an LLC to buy your first house hack can be a smart move, offering some key benefits but also a few drawbacks. One major advantage is liability protection, which shields your personal assets if any legal issues arise with the property. Additionally, LLCs can provide tax benefits through deductions like mortgage interest, property taxes, repairs, and depreciation. Operating under an LLC can also lend a professional image and help keep your personal and business finances separate.

However, there are some downsides to consider. Setting up and maintaining an LLC involves costs, including filing fees and potential legal or accounting expenses. Financing can be trickier, as lenders might have stricter requirements and higher interest rates for LLCs. Plus, managing an LLC adds complexity, requiring adherence to state regulations and additional paperwork. Transferring property ownership to an LLC also comes with legal and tax implications. Weigh these factors carefully, and consider consulting with a real estate attorney or accountant to ensure it's the right move for your situation.