Does it make sense to form an LLC if I have 2 business partners and we’re looking to start purchasing multi-family, long term rental units? What would be pros/cons? I’m assuming the 3 of us would want to continue purchasing more properties in the future.

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Yes. LLC holding company with you three as owners, and individual LLCs owned by the holding company for each property. Talk to an attorney and accountant to help structure it.

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With multiple partners, creating an LLC with the partnership details and operating agreement is going to be important.

As you acquire properties, how you hold those properties will depend on the state and the nuances of the property. I don’t agree with AD1’s approach of an incremental LLC per property, but it depends on the details.

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It’s just extra liability protection.

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There are consequences if you invest through LLC (legally and from a tax perspective) that you should learn about before investing

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Do lenders require a larger downpayment when lending to an LLC vs. to an individual?

Agreed. OP: don’t do anything without your own experienced legal counsel to guide you. It’s worth the money up front to prevent being screwed down the line if the partnership falls apart.

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