Can someone tell me the advantage to purchasing a property as a LLC instead of as an individual buyer.
Starting out, the main advantage is that your personal assets are shielded from liability in the event of a lawsuit.
Do I need to form a LLC even before I begin investing? Or should I wait until I have a few properties?
I did it before. I was getting my ducks in a row.
Call your Sec. of state to find out the laws in your state.
Then go to your local REI club and find an Attorney that understands Real Estate Investing. Have him/her set up your LLC . This will help start a professional relationship between the two of you.
Bruce
I have to respectfully disagree, IndyBruce. There are so many mundane details to this business that if you wait to get your ducks in a row, you’ll never get out there and make offers. Making offers is what generates income. First things first. You’ll need to learn asset protection for sure, but keep the cart behind the horse.
Regards,
Dave
It only takes one “slip and fall” and you can lose everything you have worked all you life for.
An LLC is so simple to set up. I feel it would be foolish not to do it first.
An LLC is not the end all be all of asset protection. But it is a good place to start. I stand by my recommendation.
Then get out there and make offers.
Bruce
I understand your line of thinking completely. It’s for that very reason I use Land trusts with my Wyoming Corp as beneficiary so my name shows up nowhere. My only point to the newbie was, don’t get caught up in the thick of thin things. Does assest protection need to be addressed? ABSOLUTELY! Is the beginning of investing the time to worry about it? NO. Obviously, the guy has lived his life till now with no protection. Does he need to spend several weeks learning the various nuances of asset protection and tax savings/ Yes, sooner the better. Does it need to be done right now rather than making offers and gathering assets to protect? IMHO, not immediately. Gather the assets, then worry about protection. The guy’s been screwing around till now without a condom…
LLC’s are cheap and easy to set up when you need it.
Regards,
Dave
Like you said “LLC’s are cheap and easy to set up when you need it.”
If it is cheep and easy, why not give your self a some protection.
Yes I feel a land trust with someone you trust as the trustee and your LLC as the beneficiary with a C-Corp as the management company is the way to go. But starting with an LLC is a smart move.
Have some goals “in writing”
Keep looking for deals
Keep reading books, courses, this forum, going to your club meetings. Do not let anybody tell you that you cannot make it.
Keep looking for deals
You will be successful.
;D
Bruce
IndyBruce,
We agree on all but the order. Hopefully this post helped him straddle the crevasse between proper corporate structure and just doin’ the biz. Ideally, he’ll do both immediately. What I’M going to do immediately is take Bluto’s advice and watch some playoff football. I enjoyed the parlay, IndyBruce…you’re a sharp one
Regards,
Dave