Starting LLC?

Question

I am in the process of buying my first property in the next few months and at 6 months in the longest. I talked to a rehab lender and everything seems to be pretty good once I get them money from some of my investors. The person I am working with says that the rehab lender only lends to LLC or corporations. My questions is: If I start this LLC and dont buy anything for a little while, will I have any expenses or taxes I will have to pay to keep open this business? Im new to this whole corporation thing so any advice or information would help me. Thanks

I am basically planning to get a bank account set-up under the LLC as well.

Jimmy Rodriguez · Answer

yeah i was reading over the LLC stuff for California today.... it's no joke out here.. heavy stuff

GANI ADEBOYE · Answer

The good thing is you are located in Illinois,I am guessing  you dont have to pay a Franchise tax which is not dependent on Income, but a priveledge for been allowed to do businessin the State....California  is an example  even if you have Loss, an LLC  MUST  PAY  
$800 to the Franchise Tax board every year,for that priviledge,  however the income correctly will be pass through via a K-1 to your 1040 return

Tyler Carpenter · Answer

Alright: thanks a lot for the information as always. Ill get it set up in soon and start trying to obtain a little bit of credit line. I think when I start my llc that in my mind it will really make me an investor and boost my confidence in that Im just one step closer to my dream.

Will Barnard · Answer

Make sure you have a well thought out plan to reach the goals you should have already set and wrote down for yourself. The plan is vital to obtain the goals.

Will Barnard · Answer

You can, but it is not necessary. A lot of people choose to set up the LLC when they buy the first property so they initial expense is not incurred before you actually own investment RE.

Having it before does give you the ability/advantage of developing credit lines.

Tyler Carpenter · Answer

So its safe to say, that even though it may be a few months before I actually buy my first property, I should start seting up my LLC and obtaining lines of credit so that the business is ready for when the time comes?

Will Barnard · Answer

An LLC is a pass-through entity so unless you make money, there are no taxes to be paid other than the set up fees to start and the annual tax fees imposed by your state as Rich pointed out.

After you open the LLC, apply (in the name of the LLC) for small credit lines to build your corporate credit. It will be beneficial for you in the future.

Richard Warren · Answer

You will have state filing fees, you can check with your local Department of State to see what they are.  You shouldnâ€™t have any tax issues until you actually have income. You may have fees associated with the bank account though some banks have no-fee checking for small businesses.

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