To learn more about positives and negatives of using an LLC to invest in real estate, Contact PB Financial Group, at 877.700.3707 to schedule a consultation.
POSITIVES AND NEGATIVES OF USING AN
LLC TO INVEST IN REAL ESTATE
If you are looking to invest in real estate, there are numerous reasons why it
makes sense to manage your investing activities through a Limited Liability
Company (“LLC”), or multiple LLCs. Though, there are numerous pitfalls as well.
Hence it is important to attain a general understanding of the positives and
negatives associated with using an LLC for real estate investing.
What Exactly Is an LLC?
An LLC is a business structure that limits the exposure, or personal liability, of a
business owner. An LLC also allows you to pass-through income to a sole
proprietorship or partnership while enjoying the limited liability to your personal
It is worth noting that the owners of an LLC are referred to as members and
there is no cap on the number of members who can be affiliated with creating an
In this article we review 3 Pros and Cons of using an LLC for real estate investing.
Using an LLC to Invest in Real Estate
There are an array of positives associated with using an LLC to invest in real
estate. For example, an LLC provides an enhanced level of privacy when
conducting business. In fact, it is quite common for celebrities and public figures
to create an LLC when venturing into real estate investing.
Another benefit is the protection afforded to your personal assets. For example,
if your company is forced to defend itself in a civil lawsuit, it is possible your
liability insurance would not completely protect you.
Using an LLC for real estate investing is not without potential drawbacks. For
example, there are embedded, long-term costs associated with using an LLC to
manage a real estate portfolio. The costs to set up and maintain an LLC will differ
from state to state. In California, the cost to establish an LLC online is around
$70. This fee is paid directly to the California Secretary of State when filing your
LLC’s Articles of Organization. At first glance, $70 does not sound bad, but this