Do You Need an LLC By Tony Martinez
I am often asked, “do I need an LLC to buy tax liens and tax deeds?” Well, frankly no you don’t absolutely have to have one in order to purchase liens or deeds. But should you have one? The answer is a resounding YES.
You should be doing everything in your power to take the proper steps in starting a business. Our business of flipping or acquiring properties requires that measure of protection be in place. By establishing an LLC you will be protecting your personal assets from anyone your business does dealings with.
Let’s discuss some hypotheticals. If someone were to get hurt on your investment property and your insurance didn’t completely cover the injuries, then you could become personally liable for the costs. Even worse still, if you successfully flipped and sold a home, the buyer could track you down and sue you for something if they wanted to. In sum, you can be personally liable and your assets exposed to risk.
So, to avoid something as catastrophic as the above scenarios, establish an LLC. The cost of an LLC is miniscule in comparison to the amount of risk you would be taking on otherwise.
Keep in mind that if you establish an LLC you must operate your renovations, flips, and acquisitions as a business. Don’t mix personal and business funds, and don’t agree to be personally liable in order to secure business credit. By blurring financial and liability lines a lawsuit could pierce the protection an LLC gives you.
Once you establish an LLC, consult an attorney and CPA to make sure you are operating correctly and therefore protected. You’ll also know who to call with your questions or if you need advice. Don’t wait to ‘get your feet wet’ before committing to establishing an LLC, do it now.
Tony Martinez is the Founder and Chairman of the US Tax Lien Association, which is an organization that is committed and dedicated to helping others achieve total financial freedom through the power of investing in Tax Lien Certificates. With over 30 years of expert experience, Tony is the world's #1 authority on the subject of creating enduring wealth through the little know strategy of investing in Tax Lien Certificates, which gives anyone the opportunity to earn guaranteed fixed rates of returns of 18% – 36% interest per year, and acquire valuable real estate for approximately 10% of market value.