LLC's I need some help!....
I am new to the real estate investing world. My goal is to buy properties and hold them and generate income from the rentals. What are the advantages/disadvantages of creating an LLC? Does it make sense to even create one? I've ben searching for info but havent really come up with anything that really helps me.
I'm sure someone in these forums will be able to answer all of your questions on LLC's, but my advice is start looking for a real estate attorney if you are thinking about starting a legal entity. You will probably need one to draft up the papers for you (especially if it is your first time), and any qualified attorney will be able to tell you everything about the pros and cons
-Dural
I am currently studying the book "Own Your Own Corporation", Rich Dad's Advisors. It is full of helpful information, but can be a little confusing. I am also curious about start-up costs and the tax system. Hope this helps a little.
The main advantage of an LLC vs. holding a property personally is the liability protection (like a corporation). The biggest problem is that lending institutions don't like to lend money to LLCs, so you have to pull some tricks to buy properties and 'get them into' an LLC. I'm studying this issue myself. It looks like there are two ways: 1. buy the property personally and then transfer to an LLC. This risks trigger the 'due on sale' clause, so I'm a bit leary of it. 2. purchase in a land trust and then may the LLC a trustee. I'm not sure of the details on this method or ramifications.
You should also know that the LLC is preferrable to a corp for holding property because of tax issues... I got that from some Rich Dad tapes.
Good luck,
Dan
it's not that they dont like LLC's but they require a personal guarentee