If you're thinking about closing a property under an LLC, there are a lot of advantages that make it worth considering. First and foremost, it protects your personal assets. An LLC creates a legal separation between you and the property, so if something goes wrong—like a lawsuit or debts related to the property—your personal savings, home, and other assets are shielded. Only the LLC’s assets are at risk.
Another big plus is privacy. In many states, an LLC can keep your name off public records, which is great if you prefer to keep your ownership private or avoid being directly associated with the property.
Having an LLC also makes you look more professional. It shows tenants, lenders, and partners that you're serious about your business, which can build trust and credibility. If you’re working with a partner, an LLC makes things easier, too. You can clearly outline who owns what and how decisions will be made, which avoids headaches down the road.
If you're planning for the future, an LLC can help with estate planning. It’s a lot simpler to transfer ownership of an LLC than it is to change the property deed. This can make it easier to pass things down to your heirs or bring in new partners.
An LLC is also great if you're thinking about scaling up and owning more properties. You can set up separate LLCs for each property to keep risks compartmentalized. That way, if something happens with one property, the others are safe. It's also easier to attract investors because they know their risks are limited to what they put into the LLC.
Finally, managing the property becomes simpler under an LLC. You can open a business bank account, sign contracts, and handle expenses under the company's name, keeping everything clean and organized. It also makes negotiating things like insurance rates easier because you’re seen as a business, not just an individual.
Of course, there are pros and also cons, like setup costs, filing fees, and more paperwork to keep up with. But for many investors, the benefits far outweigh the marginal cost differences. An LLC is a smart move for individuals looking to protect themselves, grow their business in a professional light, and operate as a corporation.
Our business-purpose rental loans currently start at 6.25%+, which is lower than conventional or fha - fyi. It sounds like folks in this thread got bad deals and are blaming commercial loans instead of the lender who overcharged them. I'd encourage you to weigh all of your options before making final decisions. All with best regards
