Ask Me Anything Mid-Term edition.

[Matthew Masoud]

This forum has done so much for me and I felt a bit guilty this afternoon for not giving back. 

Scaled to 48 Mid-Term Rentals in 2 years OH, hired a property manager and maintenance person. Quitting my job next week and moving to North Carolina to grow a portfolio there.

So Ask me anything, Mid-Term Rentals edition.

[Matthew Masoud]

Quote from @Brian Malavsky:

There are a couple great podcast episodes on asset protection, the main show ep. 595, and BP Rookie ep. 105 & 106, that give a ton of great information on what LLC's can and can't do for you.

For me, I personally use an umbrella policy for my protection but did setup an LLC immediately more so for financing later on down the road. I believe you need to show consistent income for two years before you can get financing through the business. I am working towards investing full-time and leaving my W-2 behind. So, I wanted to start the 2yr clock as soon as possible. I also keep my personal funds and business funds completely seperate. The corporate veil of an LLC can get pierced very easily if funds aren't managed correctly. It may seem complicated but it really isn't if you create a business bank account and credit card. You always can add a cash infusion into your business and repay yourself of that loan. I've been told that when you start pulling out business income (money exceeding the "personal loan" you gave to your business) for personal use is when things get dicey.

I am by no means an expert, but more so relaying advice that I have recieved. Hope this helps @Charles Lambert

Cheers! 

 You hit two key points here.

1. Having an LLC alone does not protect you from liability, mixing funds is the most common way to open yourself up to liability.

2. Financing in an LLC is difficult because you have to show income. A common way around this is to personally guarantee the loan. This is more common in commercial financing than it is in residential financing.