Electrician · Kaysville, UT · Member since 2015 · 30 posts · 0 votes
Hello everyone, my name is Derek Caldwell. I have some questions on how I need to structure myself to begin investing in the market. I am in Utah and was wondering what critical things I need to have in place before starting.
1: I have heard about starting an LLC, is this the first thing recommended before starting the investment process?
2: I assume along with the LLC that I would also need to get a business license within the state or states that I am planning on investing in, if so, is this just a standard business license?
3: At what point would I need to contact an attorney and/or an accountant for my investments, I want to cover myself but also not spend excess money?
Thanks in advance to anyone who responds, I am sorry if these have been asked before in some older posts, just didn't find specific answers.
Welcome @Derek Caldwell The first thing to do is learn everything you can from the website and Podcasts on BP. I don't think you need an LLC until you actually get going but its super easy in Utah to start an LLC you don't need an attorney or Accountant just go to the State Dept of Corps and set it up. Now you will need professional help once you get going so finding a good Attorney and Accountant that will give you advise on deals and tax issue it important. As for business licensing I don't think you need one to invest in one or 2.
I would worry about setting up LLC's once you have found the deal. If you're buying with cash, then buying as an LLC is a bit easier, but if you're getting a loan it will probably be in your name. Not many banks willing to give business credit to a business that hasn't been filing tax returns. You can vest the property into your LLC after closing for your tax and liability protections.
Make sure that there's an accountant you trust who will be doing your taxes moving forward. Ideally someone who has a lot of experience with real estate and has rental properties of their own. Even if you don't own any real estate, I'd start interviewing accountants right away. You pay them to do your taxes, the accountants that I've worked with will gladly answer a phone call or email about a question I have for free.
It is very cheap to set up an LLC in Utah, but I wouldn't do your first one on your own. Get a pro to set up your articles of organization and other docs, and once you're familiar with the process you can start drafting the paperwork on your own. If your accountant sets up the business for you, they'll also be able to tell you how to run your checking account, how to save and organize your expenses/receipts, etc.