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Can H1B Visa Holders Use LLCs for rental properties?

Can H1B Visa Holders Use LLCs for rental properties?

Summary: This is a continuation of our series of articles dedicated to H1B visa holders who are looking to invest in real estate, and more specifically, cashflowing rental properties. An important topic for investors, especially high-income professionals, is how to protect your assets. Many turn to LLCs for both asset protection as well as anonymity. In this article, we answer the question, can H1B visa holders use LLCs to hold their rental properties? 

[Disclaimer: We are not accountants, lawyers, or financial advisors, so please consult your own team of professionals about the topics covered in this article.]

Over the years, through our blog, podcast, and real estate courses, we have encountered many doctors and other high-income professionals who are in the U.S. on a visa.

They would like to create generational wealth for their families by investing in cashflowing rentals, but they wonder if their immigration status restricts them from investing.

We have covered this in detail before, but in brief, according to our team of professionals, there are no restrictions on buying and managing rental properties.

From there, a common follow-up question we hear is, can visa holders use LLCs to hold real estate assets?



Using LLCs to hold real estate assets

For those who are new to real estate investing, you might be wondering, “why do I need an LLC to hold my property?”

There are generally three main reasons investors place their properties in LLCs.

The first reason is for asset protection. The idea is, by transferring ownership of the property from your name to an LLC, you can potentially shield yourself from problems that might arise at your property.

For example, let’s say a tenant falls down the stairs due to poor lighting conditions and gets hurt. If the tenant files a lawsuit, they would be filing the lawsuit against the owner, in this case, the LLC, not you. If you want to read more about using LLCs for asset protection, CLICK HERE.

Second, LLCs are also helpful for anonymity. Let’s say something newsworthy happens at one of your properties and the local reporter is trying to find you for an interview. If it’s not the type of problem you want to be associated with, making it difficult for others to identify you would keep you out of the evening news.

Third, when you buy a commercial property, lenders will sometimes require you to buy the property in the LLC, not in your personal name.

These are all compelling reasons for someone to want to form an LLC for their investment property. However, the concern that many H1B visa holders have about forming an LLC, is that they believe their visa restricts them from doing so.

Are H1B visa holders restricted from using an LLC to hold rental properties?

Before we provide our perspective, a quick disclaimer: we aren’t lawyers, so be sure to consult your own when deciding whether or not an LLC is the right choice for you.

While some may believe that you cannot own an LLC and use it to hold rental properties, our team of lawyers has told us that there are no specific restrictions against doing so.

The main restriction is what we already covered in a prior article: you cannot employ yourself in a company that buys and sells real estate.

So if you form an LLC, you cannot become an employee of that LLC.

This isn’t a problem when you use LLCs for asset protection because there’s no need to employ yourself. In order to use an LLC for asset protection, you only have to be an owner or member of that LLC. Being a member of an LLC is like being a shareholder. It’s not an employment arrangement.



Is there any employment risk for H1B visa holders?

While there are no specific restrictions against using LLCs to hold rental properties, that doesn’t mean there is zero risk for you.

Your employer could see this activity (including forming LLCs) and object to you spending time away from work on a personal endeavor. While they might not have a strong case against you, that doesn’t mean that they won’t make the claim that you are in violation of your visa. Whether or not forming an LLC adds to this risk is unknown.

Ultimately, you’ll want to assess the risks and decide whether or not it’s worth pursuing. A lot of that depends on your relationship with your employer and your level of performance. If you have a great relationship with your employer and you perform at a high level, it is unlikely that they would pursue a case against you.



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Semi-Retired M.D. and its owners, presenters, and employees are not in the business of providing personal, financial, tax, legal or investment advice and specifically disclaims any liability, loss or risk, which is incurred as a consequence, either directly or indirectly, by the use of any of the information contained in this blog. Semi-Retired M.D., its website, this blog and any online tools, if any, do NOT provide ANY legal, accounting, securities, investment, tax or other professional services advice and are not intended to be a substitute for meeting with professional advisors. If legal advice or other expert assistance is required, the services of competent, licensed and certified professionals should be sought. In addition, Semi-Retired M.D. does not endorse ANY specific investments, investment strategies, advisors, or financial service firms.



Hi, we’re Kenji and Leti

we provide coaching and mentorship for doctors and high-income earners

Several years ago, we were newlyweds working as full-time hospitalists. On paper, it looked like we had everything: the prestigious careers, the happy marriage, the luxurious rental home, the cars, etc.

But in reality? Despite having worked for several years, we had very little savings. Despite our high income, we had very little freedom in terms of time or money.

One thing was clear: we had to do something.

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