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  • May 12, 2008 at 10:26 PM #12718
    youngster
    Participant

    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:
    ???

    May 12, 2008 at 11:03 PM #203177
    HLS
    Participant

    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.

    May 12, 2008 at 11:03 PM #203226
    HLS
    Participant

    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.

    May 12, 2008 at 11:03 PM #203251
    HLS
    Participant

    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.

    May 12, 2008 at 11:03 PM #203278
    HLS
    Participant

    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.

    May 12, 2008 at 11:03 PM #203312
    HLS
    Participant

    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.

    August 4, 2008 at 1:55 PM #252298
    gromit
    Participant

    What about trusts? Every now and then, I hear about people putting their home in the name of a family trust created just for that purpose. What’s the benefit of that?

    August 4, 2008 at 1:55 PM #252369
    gromit
    Participant

    What about trusts? Every now and then, I hear about people putting their home in the name of a family trust created just for that purpose. What’s the benefit of that?

    August 4, 2008 at 1:55 PM #252376
    gromit
    Participant

    What about trusts? Every now and then, I hear about people putting their home in the name of a family trust created just for that purpose. What’s the benefit of that?

    August 4, 2008 at 1:55 PM #252308
    gromit
    Participant

    What about trusts? Every now and then, I hear about people putting their home in the name of a family trust created just for that purpose. What’s the benefit of that?

    August 4, 2008 at 1:55 PM #252134
    gromit
    Participant

    What about trusts? Every now and then, I hear about people putting their home in the name of a family trust created just for that purpose. What’s the benefit of that?

    August 4, 2008 at 2:00 PM #252303
    Coronita
    Participant

    gromit,

    Not a legal expert. But the reason why we have a living trust is for inheritance purposes…IE it avoids probate court when you die…For a couple, allows for a higher limit not subject to estate taxes.

    I don’t think a living trust really offers asset protection, as my trust attorney tried to explain to me which i feel asleep listening to 🙂

    August 4, 2008 at 2:00 PM #252315
    Coronita
    Participant

    gromit,

    Not a legal expert. But the reason why we have a living trust is for inheritance purposes…IE it avoids probate court when you die…For a couple, allows for a higher limit not subject to estate taxes.

    I don’t think a living trust really offers asset protection, as my trust attorney tried to explain to me which i feel asleep listening to 🙂

    August 4, 2008 at 2:00 PM #252383
    Coronita
    Participant

    gromit,

    Not a legal expert. But the reason why we have a living trust is for inheritance purposes…IE it avoids probate court when you die…For a couple, allows for a higher limit not subject to estate taxes.

    I don’t think a living trust really offers asset protection, as my trust attorney tried to explain to me which i feel asleep listening to 🙂

    August 4, 2008 at 2:00 PM #252139
    Coronita
    Participant

    gromit,

    Not a legal expert. But the reason why we have a living trust is for inheritance purposes…IE it avoids probate court when you die…For a couple, allows for a higher limit not subject to estate taxes.

    I don’t think a living trust really offers asset protection, as my trust attorney tried to explain to me which i feel asleep listening to 🙂

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