What Is My Next Step?
I have just purchased a property in Hampton VA. I am going to have tenants in shortly. I dont know how this works but I hear that I should place this property under an LLC or Corporation. How does this work? Sorry for the ingnorance, but I am new to this.
Thanks.
READ READ READ!!!
This has been discussed over and over on these forums.
You can do it on your own (cheaper and you might do it right)
Do it through an attorney (more expensive and it will get done right)
or find another investor who's done it right and copy their paperwork (best of both worlds).
Your library will have a bunch of books on LLC's as well. Probably smart to read one just so you have a better idea of what you're working with.
An LLC provides you personal liability protection. In the event that a tenant successfuly sues you, they can ONLY get to the assets held by the LLC. TThey can't touch your home, car, personal bank accounts, boat, etc.
You need to have separtate funds for your LLC (bank acct, credit card, etc) and not co-mingle the funds, otherwise it won't do you any good when you do go to court. That's the main thing that you need to watch out for. There are others, but that one will come back to bite you the quickest.
Greeting mahaynes,
I’m sure the folks on this site can give you a lot of good input on LLCs and corporations, but I feel this is really a question for your CPA and attorney. A lot depends on your investment strategy, your tax situation, etc. There are pros and cons no matter which way you go.
Good luck!