Should I get an LLC?

[admin]

Posted By : Emily Jones a TLA member:

If we owner occupy our fourplex (one unit) do you recommend doing an LLC for the property? We just closed today and are trying to decide the best route to go! ☺️

[Maggie B]

I think you should for many reasons. One main reason is when you do everything trough your LLC and renters coming after you to sue you, they can onlt take what's in the LLC, not your personal posessions. Just make sure you set it all up right,  Congrats on your new property

[Erik]

This topic came up the other day in front of Brian the attorney.  It's a balancing act.  If you're prepared to carry the costs associated and always treat it as a company, then yes.  If you're just going to go on legal zoom, buy an LLC and then forget about it, then no.  If you fail to treat it as a company, a future plaintiff can do what's called "piercing the corporate veil".  Essentially that means proving to the courts that it really isn't a real company and that your LLC means nothing.  Then you're right back to where you came from.  

Maggie B is right.  Just make sure you treat it like a real company.  Minutes need to be done.  Money needs to stay separated.  Receipts kept.

Insurance is always the cheapest and easiest insurance and should always be your first defense.

[Chris S]

I am assuming that since you owner occupy you used either VA or FHA, meaning you have very little equity. Unless you have significant wealth of another means I would consider it unnecessary for the time being. Leverage is a means of asset protection. Just get good insurance and you will be fine.

[Kassandra RPM Alaska]

32 minutes ago, Chris S said:

I am assuming that since you owner occupy you used either VA or FHA, meaning you have very little equity. Unless you have significant wealth of another means I would consider it unnecessary for the time being. Leverage is a means of asset protection. Just get good insurance and you will be fine.

GREAT point @Chris S!  The point of LLC is to protect assets but if the property doesnt have assets ..."equity" ...worth going after then LLC might not be needed.

I guess the other possible reason is if you have personally assets.....like 401k..pensions...so on...that add up to a good size that you want to keep separate from the property.