S Or LLC
I'm a one man newbie investor . I'm closing my first rental property this week. I'm confused on whether to create an LLC or S chapter corp for the future. I assume I also need to get this first property under the corporation somehow. Any advice would be appreciated.
From what I gather by searching the past posts on this topic, an LLC would be best for rental property. Since I've also read that lenders usually do not lend to an LLC that is new, can anyone share advice on the best way to introduce your LLC to a lender? I'm thinking that I need to be the primary signer. But would that give me the protection from personal lawsuits that might arise from my property?
[addsig]
Once you choose the entity, then what do you do? Deed the property over to the entity after closing?
not after closing .....at closing
not after closing .....at closing
Don't get too wrapped around the axle so soon.
A business entity shields your personal assets from liability exposure if you are sued for something arising out of your business activity. The first question is how much do you have to protect? What is the value of everything you personally own? If the answer is not much, then you don't need to worry about a business entity yet.
A good landlord insurance policy with a high personal liability amount might go a long way toward protecting your personal assets. Don't let the absence of a business entity get in the way of doing your first deal.
After you get a few properties in your portfolio, let your CPA, your tax attorney, and your estate planner help you figure out the best asset protection structure for you.