To set up an LLC or not

[Darren McGillvrey]

Hello,

My wife, her dad, and I have done a few flips and have a couple rentals and as we look to grow it bigger the discussion of setting this all up under a business name with a LLC. My father-in-law and I debated over it a little and he just doesn't see the value in doing so. I mentioned the liability standpoint but he said that "They could always come after us in a civil suit!" and I didn't have a good reply to that.

Can someone please give me the Pro's an Con's for setting up an LLC?

Thanks!

[David Dachtera]

Well, you want to do fix-and-flips in an S-Corp, not an LLC.

When you get into buy-and-hold, you'll want to hold rentals in an LLC.

You also want to set up a trust to stand between you and your business entity structure. The trust is an owner of the S-Corp and a member of the LLC. The LLC is another owner of the S-Corp. The S-corp is another member of the LLC.

Your business / tax attorney should be able to explain. If not, drop a note back and I'll connect you with the law firm I use.

David J Dachtera

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