Posted by Brad (GA) on December 14, 2000 at 18:10:16:
Thanks for the info. I found out some interesting news today though. I spoke with my bank about financing this property after rehab, in order to keep and rent. They told me that I could not buy it under a corp. name. Even if I did, I would have to put my personal signature on the signature block.
I’m going to talk to an attorney. Thanks very much for your reply.
Happy Holidays!
Which business entity is best? - Posted by Brad (GA)
Posted by Brad (GA) on December 14, 2000 at 06:02:00:
Ok, I’ve read my state Inc. handbook and listened to opinions from numerous professionals. I’m really confused. I know I need to hold my rehab/flip properties and rental properties in seperate business entities. I currently hold two properties in my name and from what I’m told, that’s wrong. So,…
1.) When I do rehabs and sell fast, which business entity is best?
2.) When I do rehabs and keep the property for rentals, which business entity is best?
3.) When I do lease/options, which business entity is best?
Right now, I’m negotiating a rehab project that I intend to hold. I don’t want to use my personal name, so I have to act fast. I do plan on talking with a tax accountant / attorney, but I would like to hear first hand from people that are currently in business. Thanks!
Re: Which business entity is best? - Posted by J.Neub
Posted by J.Neub on December 14, 2000 at 16:51:09:
Brad, get your short term flips in your C corp and never an LLC or S corp. Buy your long term hold properties in your LLC or S corp. for depreciating purposes. If you have an S corp and it continues to flip properties, your corporation and thus YOU will be classified as a dealer, and pay more taxes as well as losing depreciation rights. With a C corp. you and your corporation are taxed and judged as separate entities. Hope this clears it up. Don’t get burned.Good luck.
Re: Which business entity is best? - Posted by JFinke
Posted by JFinke on December 14, 2000 at 09:00:49:
Brad,
Although I’m new at this, from what I’ve seen here and discussed with other business people, most people suggest using an LLC for real estate you will be holding, like rentals or L/O’s and using a Corp. for short term deals like rehabs, flips, etc. If you choose not to start a company, you should at least consider putting your properties into a trust as opposed to keeping them in your name.
Each entity has its own advantages and disadvantages and you should definitely speak with your accountant and attorney prior to making any kind of decission. A good professional should be able to assist you down a path best suited to your needs.
JFinke
Re: Which business entity is best? - Posted by Brad (GA)
Posted by Brad (GA) on December 14, 2000 at 18:13:58:
Thanks for the info! I talked with my banker today and they said that I could not buy thru a corp. name. I asked why and she said she would find out.
Well if this is true, how do I put the property in the corp. name once I’ve bought it.
Thanks again and Happy Holidays!