There are many important reasons to own investment real estate in a legal business entity. Asset protection is one main reason. If someone is injured on the property, using a business entity helps insulate the individual owners from personal liability. The injured person would sue the business entity owner instead. It is also helpful to use a business entity when multiple owners are involved. The ownership of the business entity can be shared among multiple owners in proportions deemed appropriate. There are also other reasons such as helping reducing taxes, and for estate purposes for wills and trusts.
For larger developments such as multi-family apartment communities, commercial office buildings and strip mall plazas, using more complex partnership arrangements and even TIC (tenant in common) agreements can be more beneficial. Often, the partnership arrangement is used in conjunction with limited liability companies to achieve a combined effect and needs of the principals.
When to put the real estate into the name of a business entity is an important question. Ideally, the title should be set from initial ownership. If there is a mortgage on the property, a commercial bank may not permit a later transfer of the property into the business entity.