Passive Real Estate Investing Do you really need an LLC before buying your first rental property?
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Sep 2, 2025 Melissa Nash, who built a seven-figure rental portfolio from her couch, dives into whether you really need an LLC before buying your first rental property. She explains the advantages of LLCs for asset protection and privacy, and offers insights on loan types, including conventional and DSCR. Melissa shares personal experiences, detailing the process of setting up an LLC in Wyoming, and the crucial steps for managing finances in rental investments. Whether you’re starting fresh or have experience, her tips are invaluable for navigating real estate.
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LLC Value Depends On Loan Type
- LLCs provide asset protection and help run your rental business like a proper business.
- Whether you need one before purchase depends largely on the loan type you use.
Conventional Loans: Close Personally First
- Use a conventional loan to close in your personal name then quitclaim to an LLC after closing if desired.
- Set up the LLC later because conventional lenders require personal qualification and title.
DSCR Loans Require LLC Before Closing
- Use a DSCR loan only if you open an LLC before closing, since many DSCR lenders require title in the LLC.
- Prepare your LLC and expect lenders to still check your personal credit.