Looking for advise for FHA and LLC. Just purchased first duplex. Renting one unit.

[Eli Jerman]

I just purchased my first investment duplex at the beginning of this month. I know I want to buy more properties in the next couple years but for my first one, how can I setup an LLC for the best asset protection? When I was going through the mortgage property the loan processor (didn't really seem like he knew what he was talking about fully) mentioned I can't put the house in an LLC because its an FHA and it might make the loan Due on Sale? He said it can be in a trust but not an LLC. Can I still make an LLC and just collect the rent and put the maintenance and mortgage payments through that LLC? Can I put the house in a trust and then put the trust into an LLC? Then the lender wouldn't know? I am not sure. I have not had the tenant sign a new lease yet because I want to see if I should write it in the LLCs name or mine. She is on month to month right now. Do I speak with a real estate attorney or an real estate accountant?

Thank you for any help.

[Stuart Udis]

@Eli Jerman I post regularly about asset protection and entity formation. You are certainly not the minority as most investors equate forming an LLC to asset protection. From my observations 90% of those who post on the forums about asset protection cannot articulate the risks they believe they are/must protect against with their recommended entity formations. I would recommend taking a look at some of my previous posts which emphasize the action items you as a rental property owner should be implementing that have a far greater impact on asset protection than merely forming an LLC. To clarify, I am a supporter of forming LLC's but in a far simpler manner than how most propose and for different reasons. Again, I would recommend reviewing some of my previous posts on the subject starting with this one:

https://www.biggerpockets.com/forums/12/topics/1185366-atten...