Protecting Your Real Estate Investments with an LLC
Being in business for yourself can be risky. Even when you are successful, it is important to keep your personal assets protected so that if problems pop up your family’s safety is secure. The way all businesses do that, including real estate investors, is by forming an LLC for all of your related transactions. Once you are an LLC you will no longer do business in your name, but rather as your company; even if it is named after yourself, it will be an entity protected by the legal structure.
What is an LLC?
LLC is an acronym for Limited Liability Company. An LLC assigns all debts acquired by your company to be covered by any assets you hold as a company but NOT as a personal asset. That means if a creditor comes after you, a deal goes bad and you owe money on it, or someone is hurt on one of your properties that you haven’t obtained insurance on yet, you may lose assets your company owns. However, those assets won’t include what you own personally, like your car, your personal home, or money in your personal bank accounts.
Setting it up
Setting up an LLC is the first move you should ever make when considering any form of business, including investment businesses. It is simple to start the paperwork for an LLC and they can often be established online without ever leaving home. All you have to do is pick a name for your company, fill out the paperwork, develop an LLC agreement that most LLC websites will assist you in doing, publish a notice in your local paper of intent to become a LLC, and you have it. Once you have that vital piece of business taken care of you can begin your career with a feeling of security, knowing that your family is protected from any problems you may encounter in your ventures.
