BiggerPockets

I think before forming an LLC it's important to understand WHY you're forming one, what are the repercussions, tax wise, insurance wise and otherwise of it being done correctly/incorrectly and then seeking COMPETENT legal advice, which is familiar with OH tax and RE law.

REI had a recent post on here about people who confuse the " appearance" of being an investor, over-concern with business cards, business name, entities etc, with the actual doing of business.

all cash

What risk are you trying to mitigate in your wholesaling and rehabbing business? Are you afraid someone will sue you because of a poor repair job and will be able to access the other properties you are rehabbing at the time? LLCs are a tool for asset protection and, at least in the case of rental holdings, a tax position tool (eg, if your state considers more than x rentals per entity as a different tax position). I think that's where all cash is coming from: what's the reason for the LLC?

For one I want to be known as a company and not just an investor or wholesaler, but also for tax and income reasons use the LLC as a pass through. Another reason I want to start now is because it takes time to start establishing business credit and qualify for business loans.

Yes the LLC will give me some sort of protection as I am doing rehabs but plan on buying insurance as well in case something does go wrong that I am sued.

So at this point I think my reasons are to keep my business and personal separate, use the LLC as a pass through, liability protection, and also to be known as a company for professional reasons.

If you wanted to really get it right you would use two different companies.

An LLC for the buy and hold property.

A corporation for the short term income activities (buy, fix sell; property management, flips and wholesale deals).

A corporation's tax rate is not that high compared to an individual when you are talking about normal short term income. In many cases the corporation rate is lower for a large amount of income. Better yet is the idea that the corporation can claim expenses that are not allowed on a pass through LLC. Medical, dental, vision care, auto, company contribution pension payments, etc. Hence by using an LLC for short term income (just about everything you have mentioned) you will be paying a higher tax rate and have a less efficient structure.

A tax attorney or really good CPA who is used to structuring a business can walk you through the details. An online system to fill out some forms will completely leave you in the dark so you will not know what you are missing out on.

You sound like you are thinking long term when it comes to building credit, professional identity as a business. Consider buying in good advice. A cost of doing business.

If you are doing a decent amount of business producing short term taxable income the right structure will save you more in taxes than you spend to get it organized.

John Corey