Need Advice on 2nd RE Investment

I currently own a home, and I am interested to buy a 2nd property (Condo) for rental investment. I appreciate if you can help me with the following:

1) What is the complication if I were to buy the property under my name before setting up LLC and transfer the property over? Or will it be simple if I were to set up LLC first before buying? I am not familiar with how the lender would treat my application under different entity -- me VS llc. 2) If I did not set up LLC but instead buy the property directly under my name, would I get a tax deduction on the property expense? like the interest, property tax, etc? 3) I heard that LLC must show a profit 2 years out of 5 years. So if I were have the investment property under the LLC, and I did the deduction of depreciation over 27.5 years, I think I would be constantly showing negative cash flow. So, how would I make the property turn profit 2 years out of 5 ? Thanks in advance for your time and effort! shawn

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Reply to
sftong2000
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Your biggest issue may likely be with the lender. They may not want to allow you to transfer to an LLC after they lent you the $$$$$$$$.

An LLC is usually an ignored entity for tax purposes.

I think you are referring to the hobby loss rules. Having an LLC or not won't affect the hobby loss rules.

Reply to
Benjamin Yazersky CPA

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