Real Estate Organization Setup - Posted by Brenda Grossnickle

import · October 20, 2003, 9:37am

Posted by Brenda on October 20, 2003 at 09:44:34:

Sorry, longer term holdings in an LLC and shorter term in an S-Corp.

import · October 20, 2003, 9:37am

Posted by Brenda Grossnickle on October 20, 2003 at 09:37:59:

I have 6 rental units and continue to add more. I manage all my own rentals and some rentals for other people. I also have started two rehab projects and plan on doing more rehabs and some lease options.

What I have read so far would indict that the rentals and LO should be held in an LLC and the shorter term (rehabs and flips) in an LLC. (1) can an LLC do a 1031 exchange (2) What about FL land trust and the property management company?

My thinking is to have an LLC or S-Corp as the property managment company. Most negligence or liability issues from the rentals will arise from the property manager and you would not want assests in the same corporation as the property management company. So you should seperate out the managment from the rentals.

Also, each of the rentals could be in a seperate land trust (very common in FL) and the FBO (beneficial interest) is the LLC that “owns” the properties.

For the short term strategies I guess an S-Corp has the best taxation benefits.

Also, if something like the above is doable and an OK strategy, what liability (umbrella) insurance should the S-Corp, LLC, or individual (me) purchase. Is liability insurance still necessary?

Thanks

Brenda