RE Investing: LLC, C, or Self

User Forum Topic
Submitted by youngster on May 12, 2008 - 10:26pm

I have seen many recommendations for using a LLC for real estate investing, but are the hassles to create a LLC worthwhile?

LLC Requirements:
-Corporate red tape, fees, forms, and complexity
-Probably still have to personally back loan
-Still requires insurance
-Unproven (recent) business structure
-Unable to use primary residence financing or capital gain exclusion
-Double taxation (Do you really go through the hassles of continuously changing your salary?)

LLC Advantages:
???

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L-I-A-B-I-L-I-T-Y
Submitted by HLS on May 12, 2008 - 11:03pm.

L-I-A-B-I-L-I-T-Y
LLC=Limited Liability

Any income/losses from an LLC is generally "pass through" there is no double taxation.

Talk to a tax advisor & attorney.

You cannot use primary res financing or capital gain exclusion on rental properties whether it's in LLC or not in LLC.

You need to ensure that the corporate veil cannot be pierced.

Yes you will need to qualify for loans and need insurance.

LLC is a legal entity that owns the property(ies)

With a lawsuit, only what is in the LLC is at risk.
Without an LLC, you and everything that you own is potentially at risk.

You would normally buy property in your name, qualify for the loan, and then deed the property into the LLC.