HI! So im just now starting out from scratch. I have questions as far as setting up your business. I know that i have to set file my business with my state (SC) as LLC because that's what I want but when it comes to getting my EIN what would you suggest to register as with IRS? I dont want to get smacked with a lot of taxes and I'm super lost in this area. I've watched videos on youtube but it doesn't really cover that area. Any information that you have would be great. Also do you have to set up a separate LLC for each property, if they are rental properties?
Anisha - So many people get lost in this. Please don't get too concerned about the LLC structure. Just get out there and start doing the work it takes to make money. IF you make money without doing it with an LLC it makes no difference what so ever tax wise. See the next sentence. When you set up an LLC it will report on your taxes under you SSN for the IRS. So why have an LLC? Well to limit your liability. How much liability do you have? Are you sitting on a boat load of cash or other assets? If you are then the LLC starts to take on some importance. Prior to the LLC I would be more concern with a nice Umbrella Insurance policy. That will save you better than any LLC.
Now to the LLC.
1: Wholesaling houses - Try to do the contracts within an LLC and limit your liability.
2: Doing rehabs & Construction - Same as above.
3: Rentals and you have a boat load of cash, you're putting down large down payments and getting commercial loans - Same as above.
4: Rentals and you're are getting a traditional loan - Then everything has to be in your own name and have an LLC does you no good. (Though you might manage the property using an LLC, but doubt that would actually get you out of any liability)
Good luck - rock it.
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