Confused on how to start
Hi Everyone,
So here's my situation. I'm a Realtor in PA and my best friend is a licensed contractor. Our fathers are willing to give us a loan for a flip project and will be repaid after closing.
We're looking to get a mortgage for a $70,000 property. So I guess my confusion is whether to buy this as a "personal" investment property or start an LLC and purchase it under the business's name?
Our future goal is to have our own "developing" type business anyway, so we'll be putting our profits right into the next project.
Should we do the first few as personal investment then start a company? I'm so confused!
Any help,advice, and ideas are MUCH appreciated.
Thanks!!
Most Popular Reply
Regardless of any information provided herein by others, I would advise you to speak to your financial advisors (RE CPA/RE Attorney) as you are asking for legal advice here.
I am neither and this info is not to be construed as legal advice, however, I was advised by my legal counsel when starting out to use a business entity even for the very first property and there are many reasons for it. Which entity to use depends on the individual investor's situation, however, since you mentioned a partner, one of the best forms of entities to flip with while having a partner is an LLC which is taxed as an S-Corp. This entity is good for the partnership because an operating agreement is easy to draft from your attonrey which will lay out all the rules and guidelines for the partnership. The LLC will provide inside liability protection for the partners and the taxing as an S-Corp while provide the best tax advantages. This is my opinion, so consult with a competant CPA/tax attorney on this subject.