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Do I have to form an LLC if I want to purchase a multi-unit complex for rental property?

I would like to purchase a commercial property.What are the possible ramifications if I do NOT create an LLC? by gil.shum76106 from Fountain Hills, Arizona. Aug 28th 2015 Reply


Jim Glaskin (Visionjim)
#134 ranked lender in Arizona - 3 contributions

No you do not have to take title in an LLC. However, the majority of investors do form an LLC that gives you better insulation for any liability issues that might occur in owning the property. The cost of setting up an LLC is very inexpensive. I am a commercial mortgage lender and have arranged over $1B in loans. Please contact me if you would like to further discuss the LLC or to discuss financing. Thanks,Jim Glaskin 602-300-4861

Aug 28th 2015
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Dan Paladin (dpaladin)
#0 ranked lender in California - 414 contributions

No that is not required. If your CPA suggests that it could be for tax purposes/liability but not required to purchase the property.

Aug 28th 2015
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William J Acres (William_Acres)
#0 ranked lender in Arizona - 7,788 contributions

If you intend to use a conforming loan product, then you will need to be purchasing 4 or less units.. and if this is what your looking at, then you would be purchasing in your own name, not an LLC.. and then once the loan closes, it's possible the lender will allow you to deed the property into an LLC. If your looking at 5 or more units, then it will be commercial financing and for most of this type of lending, purchasing in an LLC is allowed and very common. You will still need to personally guarantee the loan, but it can be done in an LLC. If your question is "Do I need an LLC".. then that's a question for an attorney.. the reality is that if you own any business, it should be held in a separate entity other than yourself. But you should seek legal advice as to why.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Aug 31st 2015
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