Setting Up An LLC For Your Investment Properties
Investing in real estate can be a great source of income and a great vehicle to increase your net worth. Or it can be a complete disaster. Which one depends on the decisions you make. Holding your investment properties in your personal name(s) places your other personal assets at risk. One protection that is relatively easy and cost-effective is setting up a limited liability company (LLC) for your investment properties rather than holding them in your personal name. LLCs and operating agreements are discussed in greater detail on this website.
Limited Liability Companies For Real Estate
One limitation to holding your properties in an LLC is that you likely would not be able to purchase or refinance with a loan that would be sold on the traditional secondary market, i.e., Fannie Mae and Freddie Mac. Also, transferring your properties to an LLC may invalidate your title insurance and require changes to your hazard insurance policies. You don’t want to do this incorrectly.