LLCs for Real Estate Investors

What are the pros and cons for using LLCs with your real estate investments?

Should Real Estate Investors Use an LLC?

If you're investing in rental properties, you've likely heard about buying through an LLC (Limited Liability Company). While it's not required, there are some clear advantages—especially when using DSCR loans or building a growing portfolio.

✅ Key Benefits of Using an LLC:

• Liability Protection: An LLC separates your personal assets from business risks, helping protect you if something goes wrong with the property.

• Simplified Tax Reporting: LLCs can be taxed as pass-through entities, avoiding double taxation while keeping bookkeeping organized.

• Easier Portfolio Scaling: Many lenders (including DSCR lenders) allow multiple properties under separate LLCs, which can simplify financing and risk management.

• Professional Image: Operating under an LLC can help position you as a serious investor when dealing with partners, lenders, and contractors.

⚠️ Things to Consider:

• Not all lenders allow title to vest in an LLC, so always confirm up front.

• Some states charge annual LLC fees or franchise taxes, which may impact costs.

• You’ll still need to personally guarantee most investment loans, even in an LLC.

Bottom Line: Using an LLC for real estate investing can provide legal protection and long-term structure—but it’s not one-size-fits-all. Talk with your lender and CPA to make sure it aligns with your investment goals.

Need a DSCR loan for a property in your LLC? Let’s talk—our programs are investor-friendly and LLC-ready.