Should I start an LLC before actually purchasing a property?

Question

I'm looking to eventually get into investing in real estate full-time. Right now I'm looking for a couple of fix and flips a year, and I'm open to other strategies as well, buy and hold with cash out refinance is appealing to me. Since, I intend invest full-time and run my investments as a business, would it be best to form LLC prior to investing? All input is appreciated!

Kris Baldwin · Answer

Account ClosedThanks. Makes sense.

Account Closed · Answer

@Kris BaldwinI would consult an attorney but I think best way to go is set up structure first

Kris Baldwin · Answer

@David DachteraThank you for the advice. I have been getting things together, but haven't filed yet. You make a great point.

Kris Baldwin · Answer

@Al WilsonThank you. That's what I suspected.

David Dachtera · Answer

@Kris Baldwin,

You'll want to set up your business entity structure as early on as you can and start building credit in those entities. That way, the day will come sooner when you can have the entity make the buy rather than buying it your self and having the entity buy it from you to satisfy lender "Due on Sale" issues.

You'll want your long term holdings in LLCs and your fix and flips in your S-Corp, C-Corp or whatever.

David J Dachtera

"Success is not a destination. Failure is not an event. Success is a process, failure is a choice."- DJ Benedict