All Forum Posts by: Alvaro Tuchan Jr

Hi there! I would recommend using an LLC for your propery to add an additional layer of liability protection. It can be useful if the LLC is also an anonymous LLC to add another layer of insulation for you. The LLC can also provide some tax benefits. You will then set up a biz account for the LLC and collect rents through such. A stronger alternative (although a slightly more complex set up) is to have one LLC that owns the property (a holding LLC) and one LLC to manage the property (the would be a shell LLC that never holds assets and is only used for public facing activities like interacting with tenants. The dual LLC set up is useful because if a tenant or third party were to sue, they would sue the operations LLC that doesn't own anything so there would be nothing to recover. I would look into softwares like Stessa as well which can be useful for accounting when managing. For resources to review, Royal Legal Solutions has a ton of videos/articles/books geared towards new investors and best practices for entity structuring and operations.

Passive income is best in an LLC, but if your flipping and making improvement then a Corp is better.

Always keep business separate from personal to keep your legal protection. If you abuse the conditions the courts will do the same and not give you the legal protections business structures give. Also if you continue to expand you open an LLC for each property especially in Cali where equity builds quick which is your asset pool for litigations and future REI!

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