How To Set Up An LLC To Buy A House

How to set up an LLC to buy a house. Let's talk about this. Are you going to buy a house for rent? Are you going to buy a house for short-term rent Airbnbs? Are you going to buy a house, meaning your home, and do you put an LLC across all of these or one of the three? Stay tuned. We're going to talk about all of it. So the fourth thing specifically we're going to talk about is what is the LLC? Like what is it on behalf of buying the house, the advantages of buying a house. I'm going to go long-term, I'm going to short-term, and I'm going to talk about your home and when you would ever do that, the disadvantages of doing those same three examples. And is it right for you? And there is some timing to it. So you've got to grab a pen and paper and stay tuned all the way to the end so you can learn whether this is right for you. So what is an LLC? It's a limited liability company. Now, if you're watching this from other parts of the world, which I have a lot of international viewers, in concept, this works in every continent. I have traveled and taught in all continents but Antarctica. The little penguins down there really don't care about this, but they do, by the way, have corporate structure. It just might not be called. It might be a proprietary limited, limited proprietary, just a corporation or partnership. So in concept, what we're talking about is the coverage, an entity that's going to cover up the asset. You're going to put the asset inside this LLC. It gives you number one tax advantages, which is why I'm such a huge proponent. In fact, right now, if you go up to my search bar and look for anything that I've talked about, why I have an LLC, how to do deductions, tax advantages of LLCs, I've got so much content. If there's something specifically that you're searching for that's not there, go to the comments below and comment, comment, comment. If you have a significant other, you better be sharing this content and say, subscribe all, click your notifications. And as I educate you every day, you're going to need to talk about some of these things, especially the LLC with a significant other family members. This is not like small decisions. I think they're critical. I think when somebody is 18 years old, they need an LLC. Why? You can't live without tax advantages. There's nothing you can deduct as an individual. All right. You can get a little Schedule C, but why begin? If you're going to begin the game and be a business owner straight into an LLC, same with a home. It's going to give you tax deductions. You treat it like an entity, a corporation that has a property in it. So the entire investment is going to be wrapped in this LLC. Now you can travel anywhere in the world. There's guidelines from the IRS, but now you can go on business trips all over the world and look at other real estate because you're interested. Without the LLC, you have no legal right to do the tax deductions. You also don't have the asset protection and the liability protection. You don't have the protection. So for example, you buy a property without an LLC and it's just your name on it. And I don't know how many clients I get that have their own name on a rental property. If that tenant walked outside, slipped on the ice, fell down, whatever they did, and this property is not an LLC, they can come straight through for all your personal assets. They can come to your personal home. They can get your personal vehicles. They can get your personal business unless that's in an LLC. So the way that we teach, meaning integrated wealth systems, LLCs and entity protection and asset protection is each asset has its own entity within a certain scope of money rules. So do you need an LLC? Absolutely. I wouldn't even get in the rental business. So the advantages of an LLC, number one is again, you have privacy, you have asset protection, you have liability protection, anything that happens inside that property stays contained in the LLC. They can't go outside of the LLC and sue you for something else. So huge advantages to having the entity. And that is whether it is a long-term or short-term Airbnb or even your home. And I'm going to come to your home at the end of the video, because there's a lot of detail around that. The disadvantages, yeah, there's a little bit of paperwork. There's a tiny bit of cost. It might cost you from as low as a hundred dollars in some States to as much as 800 to $2,000 in some States. But you know what? If you're doing this because you're in business and you have this as a asset allocation and what you want to do to grow your wealth, you protect it. So to me, it's a non-negotiable point. If you're going to be my client, you're going to have your assets tucked inside an LLC, an S-Corp, C-Corp, or whatever that like entity is, wherever you are in the world, it's absolutely imperative. So the only disadvantage is some costs and a little bit of paperwork. There just isn't enough disadvantage to not doing it. So when should you do it? Now, if you're looking at buying property, you can wait a minute, but I'll tell you when they have to happen. They have to happen by the tax year end. So by 1231, where your income's, if you have not set up that corporate structure, the whole entire year is, it will be disallowed. So it has to be within the tax year end. So say you bought a property around April or May, I'd say you ought to buy it right away. You don't want any tenant issues during that time, but worst case, you will now be void of all tax benefits if you don't have that corporate structure. And you say, well, what do I do if I already have a property? And I'm listening to your video now. You do what's called the quick claim deed. You can take your properties and you quick claim them into the LLC. That includes your insurance. That includes any of the assets that go with it. Let me tell you a story about a property that I have, and thank God it was in an LLC. I have a property with several partners in Kansas, the middle of nowhere, Kansas. And one of our tenants fell asleep smoking a cigarette. And when he woke up, obviously, fire department was there. Half of our units had burned down. So yes, we had insurance and yes, it was in an LLC, but none of those other tenants could sue me directly, my partners or other investors directly. All that was contained in the LLC because it protected against that. So I don't care if you have a single unit, a duplex, a fourplex, 16 units, you've got to have an LLC to tuck in and protect against really other people's behavior. Now let's get to the big one, which is, should your home be in an LLC? Now, before we do that, I want you to subscribe to my channel, click the notification button. And if you're enjoying, especially this conversation, because investors, your partners, your family are going to need to know about this and get agreement about putting the property in an LLC or an S-corp or a C-corp, whatever your tax advisor tells you to do. And we have a team, we can do that analysis for you, but get them to share, like be here on my channel every day, five days a week. All right, so you have a home, should it be in an LLC? Well, first of all, if you haven't qualified for your homestead exemption, you want to make sure that you are doing that. So that's just something that you do when you own a property. Now, whether you go on an LLC or not depends on you. Is this going to be a home where you're going to stay and it's an estate home? You're going to be here for a long time. You're not going to sell it. Other people, like it's going to be really, I'm going to call it an estate home. Many times in those situations where it's going to go from one generation to another, or a property is, you want to put those in an LLC or even an LP, right? A limited liability partnership with your family. And that's a whole different conversation. But at the end of this conversation, I'm going to give you an opportunity to talk to one of my experts about what's right for you and your family and your estate. So for many of my high net worth clients, that they have estate homes and they're not moving from home to home because you said, what's the alternative? Well, the alternative is every two years when you move, you have to stay somewhere for 24 months, you can move and actually move $250,000 as an individual or $500,000 as a couple tax-free to the next property. So if you're one of those where you're going to buy fixed or upper, take the tax advantages, move to the next property and then move to the next property, but it's just you and your family, I'd say as an independent, you can own your own home. But if it's an estate home, you want to consider moving that into an estate, right? LLC or a limited partnership held inside your family trust. And then guess what? You become a renter. I know for you lot, a lot of you high net worth people saying she's crazy. Now you really need to research it. So many of you haven't heard of this because it is a high net worth strategy that many, many take on. I mean, you have to think about the folks who have homes across the country, two homes, four homes. Yeah. You hear about those people, right? I was those people, right? It's a lot to manage. So I like one big estate home and lots of condos, other places. But for some of you, depending on your lifestyle, this is big, big family decisions. You want to take this on seriously and you do become a renter. So you heard the concept, you want to own and nothing can control it all. This is how you do it. You put everything in LLCs and you become the renter. And guess what? You can rent of a variety of homes and places that you want to stay. So I can promise you when you hear someone say, I have three homes, or I have a home in the Hamptons, or I have a home in Arizona, or I have a home in Mexico, 99% of those people have those homes inside of an LLC or limited partnership held in trust, and they're a renter. They have a formal lease agreement with each property. They actually pay rent. They pay a portion of utilities and the internet, whatever the bills are. But you literally take on a very different structure on how you forecast, how you make money, how you spend money. So if that's interesting to you, let's begin. I want you to go take my financial personality quiz. It takes about 30 seconds. You're going to take the quiz. It's going to pop back out who you are and what you're doing. And by the way, if you've been on my channel for a while and I've sent you here before about every six to eight weeks, it's okay to take the quiz again, because if you're progressing, your personality should be changing based on what I'm telling you to do. So take the quiz and I'll shoot you back a video on what to do about it. Then I'm going to send you about an application to talk to one of my team members. Specifically, I'm going to send this application to my partner, Scott, to talk about entities, trust. What do you want? What's right for you? What's right for your family? So check it out, take the quiz, fill out the application, have a conversation with our team, and we'll talk tomorrow.