LLC or Corporation ? Which should I use?

Question

For real estate investing, should I form an LLC or a corporation? I want to fix and flip and also purchase a few rental properties.

Basit Siddiqi · Answer

@Billy Jemial MillerFix and flips and rentals are treated differently for tax purposes and may want to be put in separate entities. Best to talk with your accountant/lawyer when choosing an entity.

Chris Mason · Answer

Yup that's correct, Fannie Mae loans are to persons, commercial loans with higher rates and shorter terms are for business entities.

Billy Jemial Miller · Answer

Think you for all the helpful information. I will search BP for more information and will definitely look into getting a CPA.

Brian G. · Answer

@Billy Jemial Miller I've heard that people generally separate flips from their rental portfolio (ie separate entities) for liability purposes and asset protection. Currently I just have property in my personal name. Keep in mind how you hold your property (ie personal name or LLC, etc) affects the type of lending you can get. For example, I don't think you can get conventional financing (ie the cheapest longterm money) if you do hold property in an LLC. @Chris Mason is that correct?You really should be working with a CPA to advise you on entity creation (or not) and tax efficiency so you have the right foundation going forward. Try searching the forums as well, I'm sure there is a lot of content that speaks to this. Hopefully other more seasoned investors will weigh in as well on this post. All the best!

LLC or Corporation ? Which should I use?

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