23 - Should We Create An LLC For Our Real Estate Investments?
Play • 32 min

This is a question that comes up a lot – even though it’s probably not the most important question.  Your investment strategy is more impactful than a choice of a business entity.

Nevertheless, an LLC can be a useful tool for some types of real estate investors and certain investments.

What are the advantages of having an LLC for your investments?

  • A properly created and managed LLC can shield your other assets from liability and debts.
  • It separates your personal and business affairs.
  • It allows you to take on some debt that is either not personally guaranteed or not on your personal credit report.
  • It facilitates simple and complex business arrangements.

What are some disadvantages?

  • Some lenders will not allow it.
  • You are mostly limited to commercial loan products, which have higher fees and rates.
  • There are costs to the state.
  • You must manage it appropriately to keep the benefits.
  • You are still liable for any personally guaranteed debts.
  • There is some up-front work.

What are some alternatives?

  • Corporations and S-Corporations for active income.
  • Umbrella insurance and other insurance products.
  • Partnership Agreements.
  • A management entity instead of a title-holding entity.

Join Jason Muth and Attorney / Broker Rory Gill of NextHome Titletown and UrbanVillage Legal in Boston, Massachusetts for another episode of The Real Estate Law Podcast!
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