Legal Question in Real Estate Law in Maryland

I am looking to start purchasing investment rental properties. My initial purchases will be multi unit buildings that I will have to get a loan for. My future plan is to reinvest all income on more properties until I have enough to develop or go commercial. Should I start off by purchasing these properties through an LLC so I do not have all the debt over my head?(I eventually need to purchase my own home) Or should I just transfer them later? I evenyually want to use them to build credit and equity for my company.


Asked on 3/14/12, 8:27 pm

1 Answer from Attorneys
Cedulie Laumann Arden Law Firm, LLC

Owning rental properties through an LLC can greatly minimize one's liability exposure. For that reason, anyone with rental or investment properties should consider owning through an entity.

It is unlikely that a lender will loan to a brand new LLC without a personal guarantee from the individual LLC members and thus the debt analysis may be the same regardless. One cannot "transfer" property encumbered by a mortgage without paying off the loan and your description does not describe how you plan to clear the debt.

Your comment about "going commercial" isn't clear. I strongly encourage you to seek legal advice before commencing your operations. My firm offers a no cost initial telephone consult of up to 10 min for business or real estate matters or you could contact another attorney of your choosing.

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Answered on 3/15/12, 8:53 am


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