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Do You Need an LLC By Saen Higgins
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.
Saen Higgins is the Co-Founder of US Tax Lien Association. He is one of the world’s foremost authorities on the subject of investing in Tax Lien Certificates and Tax Foreclosed Properties. He has been training and speaking internationally for over 25 years. Saen is passionate about sharing his philosophies on real estate investment and creating financial freedom. His extensive knowledge in the field of self-directed retirement accounts has changed the quality of life for thousands and the way they invest. Saen’s devotion to helping people creates true financial independence and is only matched by his business partner, Tony Martinez.