First Deal New Jersey - have I missed any important steps that might lead to failure?

[Deanna Betancourth]

Hello everyone.

Just starting out on our journey of flipping. Having done real estate for a few years as a part-time agent, my friend and I decided to see if we could flip a property. We have done the basics: trusted lawyer, interviewed contractors, estimated materials and started looking for the "one", reviewed comps and areas close for us to manage. Presently waiting for a short sale to be approved. Is there anything we may have forgotten to do? I'm a full time financial analyst so I have done all the financials using all the guidance in the forum. However, wondering if we should create an LLC for the first flip or wait to see if this really does become a viable business for us. North jersey is not the easiest area to find good flips as there is a lot of competition. Any advice would be greatly appreciated.

[Rick C.]

I would speak with your lawyer on this. However, as an investor who is NOT a lawyer, I would recommend creating the LLC now, because if you flip with your personal name, all of your assets will be exposed. Yes, there is insurance coverage to help mitigate that, but that does not give nearly the amount of protection that an LLC provides. You are already risking a significant amount of money on this flip, so for a mere few hundred dollars more, I would say it is worth creating one.