Holding company structure
Hi there,
I will be investing in my first property (Quad) soon. Im in the process of securing financing and setting up the company structure. I have decided that since I plan on doing lots of different investments it makes sense to set up a holding company LLC with a subsidiary LLC located in the target property's state. I find the holdco structure apealling because (1) I plan on doing other real estate deals in other states/more llc's (1 for each state) (2) plan on holding other alternative investments (Private equity for ex), and (3) I can setup and apply for business credit at the holdco level.
Regarding the business credit, it seems dumb to have established credit in a single entity domiciled in one state and seems it would be difficult or perhaps illegal to get a loan from one entity and take the money out and transfer to a lower credit quality entity. Instead, the holdco will be in operation the longest so it should be the most credit worthy and I could get financing and just pump the capital down into one of the subs. That said I have a few questions:
1.) Am I thinking about this correctly and does my proposed plan make sense?
2.) Given you only get one shot at setting this up properly and the structure is a bit more complex for me to be comfortable doing it myself I am thinking about getting expert opinion on setting it up properly. Should I consult an attorney or a CPA or both? My sister reccomened a CPA. I am thinking hoping I can get sound professional advice on the proper setup for no more than $3k, is this realistic? Also, if you guys know anyone/company you reccomend for these sorts of things please advise.
Thanks,