Do You Need An LLC To Invest In Real Estate?

To get a real estate investment loan from Navigator Private Capital, the answer is —YES. In real estate investing, there are lots of moving parts and potential pitfalls. An LLC allows you to create an entity that limits your personal liability. 

What Is An LLC?
An LLC stands for Limited Liability Company and offers some of the benefits of both a partnership and a corporation. It is essentially a corporate structure that allows for the pass-through taxation of its members as in a partnership while limiting overall liability as in a corporation. More often than not, real estate investors may find an LLC necessary to obtain financing. 

Why An LLC? 
As a private real estate lender, NavCap makes loans to clients for investment purposes. Since we don't require income or tax statements to qualify, we consider the value of the hard asset associated with the loan—in this case, the rehabbed or rental property. Unlike a residential home mortgage where the owner occupies the property, these short-term hard money loans are business loans—not consumer loans. And as such, borrowers are required to establish an LLC to receive the funds. 

An LLC provides some benefits to you as the investor too — namely, it provides:

  • Limited liability: As mentioned earlier, an LLC can protect your personal assets from liability in the event of a lawsuit or financial default. 
  • Tax benefits: There are some tax benefits to using an LLC for real estate investing. For example, you may be able to deduct losses from your personal income taxes.
  • Credibility: An LLC can give you more credibility with lenders and investors. This can make it easier to get approved for a loan or to raise capital.

Have questions about setting up your LLC? Want to learn more about our innovative financing programs for real estate investors?

Contact us at or 888.444.3160 to be put in touch with your loan officer. We are here to help!