LLC to buy real estate..pros and cons

**nicknick** · 02-08-2009, 09:16 PM

hello everyone! any body knos...or has ever set up a LLC to buy a property?..how does that work?..pors and cons?

**MrREO** · 02-09-2009, 03:24 PM

The cons: the additional expense and labor of setting one up, paying the annual renewal fee, opening new bank accounts, paying your accountant more, etc.
The pros are a little harder to enumerate. You can sell the LLC instead of the property, thus avoiding transfer taxes. You can THEORETICALLY reduce your litigation exposure, but LLCs are extremely flimsy for this, unless you aren't the managing member, and even then an intensive lawsuit will still find you and put the judgment against you personally (thus attaching to all of your other LLC ownership).
I'm not impressed by the protection they offer, but I suppose it's better than nothing. It makes it a little bit harder for a plaintiff to find all of your assets, but they can still find them.
Good luck!

__________________
Greg

**nicknick** · 02-09-2009, 03:35 PM

everyone says you can open it for free online..?
..I am opening not to minimize risk..legal implications etc..it is a small little investments between two friends..simple put i need for my friend to put down 1/2 of the down payment...that's it..just cause of that..does it make sense to open a LLC for that..O r should I do it personally and ask for 1/2 the money form my friend and maybe sing a contract between the two of us, aside, stating we are actually splitting everything...am I making sense?
Nick

**MrREO** · 02-09-2009, 03:55 PM

Open an LLC, and offer to let your friend be the managing member. Set up a shared bank account where you are both signers, and watch the accounting VERY closely.
Good luck,