Use a LLC to hold a real estate investment property?

[jlcl]

What is the name of your state (only U.S. law)? California.

I plan to purchase a real estate investment property but I heard the best method to hold the property is to hold the property under a LLC in order to not subject my primary residence to a tenant lawsuit. Is that the best legal entity to hold a rental property or do you have other suggestions? What types of lawyer (real estate lawyer of asset protection lawyer) do I need to contact to set up a LLC if that's the best method to hold the property.

 

[tranquility]

Either of those types, or a tax attorney or a general business attorney.

Your goals will be discussed and the best protections will be planned to meet your goals. One question is how big of an income property are we talking about? This can have profound effects on the taxation aspects.

 

[jlcl]

The rental investment property is a single family home that would cost about $600k.

 

[tranquility]

For a single home which you don't live in in CA, odds are your goals will align more with an LLC than an S-corp. Any attorney can help you start up your corp.

 

[HomeGuru]

I agree with the first response.

 

[jlcl]

Thanks. Since I reside in California and my investment property is in California, does it make a difference if I set up the LLC in Delaware or must I set up the LLC in California. What are the advantages vs. disadvantages between California vs. Delaware formed LLC. Just want to do a little more research before speaking to the attorney.

 

[tranquility]

Then, do research. Such a question gets to your goals as each has advantages.

 

[HomeGuru]

Yup, research helps.