Real Estate Professional · Fayetteville, NC · Member since 2016 · 67 posts · 16 votes
Greetings BP,
I'm setting up my business and I need someone to point me in the right direction for my Articles of Incorporation. My S-Corp business will include buy and hold and also developing rentals and doing real estate developments and my LLC (which I plan to set up later, will be for flipping homes) but the primary focus right now is rentals. I just need Articles of Incorporation for business in North Carolina- I play to expand I just want to master NC first. So any NC facilitators please come forth.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
9y
@TJ Peterkin, just my two cents, but I would use an LLC for your rental business and a Sub S for doing flips. Talk to your accountant, but the tax consequences will be better for flipping using a Sub S as you can pay some of the gains as wages and not all as short term capital gain. Again talk to your accountant.
Investor · Orlando, FL · Member since 2012 · 183 posts · 155 votes
9y
@TJ Peterkin Side note here. I have no clue what stage you're at in your ventures but just wanted to suggest you don't get caught up in all of the "business" side of things as procrastination to actually finding deals. If you already have some deals in place and it is now time to set up the business side then disregard all of this. I just know that a lot of people (myself included) get caught up in all of that before even finding a deal. There is the argument that it should be in place beforehand but my point of all of this is don't let it distract you from what matters, finding deals. Good luck. (Just read your profile, you're probably at the right stage for this but I'll leave this here for any future readers anyway.)
Investor · Dedham, ME · Member since 2016 · 12 posts · 1 vote
9y
I'm at a similar stage at this point. I will be visiting my local small business development office. They hooked me up with a mentor. This will help get me on the right track and so I don't spend hours researching in the wrong direction. Your skill set is in real estate. Do what you do best and find efficient ways to get through the muck!
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
9y
@TJ Peterkin, just my two cents, but I would use an LLC for your rental business and a Sub S for doing flips. Talk to your accountant, but the tax consequences will be better for flipping using a Sub S as you can pay some of the gains as wages and not all as short term capital gain. Again talk to your accountant.
Lender · Raleigh, NC · Member since 2012 · 957 posts · 639 votes
9y
@TJ Peterkin TJ--if you are serious about this business, you should consult with an attorney or an accountant to develop your strategy so you can then determine your entity. Issues to consider are whether it's just you or there are partners, if you plan on having different LLCs for different holds, if you want to incorporate strategies to shift from ordinary to capital gains when selling the holds, and much more.
Flipper/Rehabber · Charlotte, NC · Member since 2015 · 93 posts · 31 votes
9y
I think above threads are spot on. If just starting out, you may want to focus on finding deals before spending the $$ and time on business entities. However if you are ready for starting the entities, I would definitely consult an attorney and accountant for advice as to your situation. I first started doing what I thought was right with the on line legal services creating my documents and was later told I would be much better off to go an entire different direction. Seek counsel first and save yourself the time and money of mistakes.
Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
9y
@TJ Peterkin I was just about to say exactly what @Jerry W. said. LLC for rentals. S-corp for flipping. Consult a CPA or attorney, of course, but for most people, this would be the best structure for taxes
I'm setting up my business and I need someone to point me in the right direction for my Articles of Incorporation. My S-Corp business will include buy and hold and also developing rentals and doing real estate developments and my LLC (which I plan to set up later, will be for flipping homes) but the primary focus right now is rentals. I just need Articles of Incorporation for business in North Carolina- I play to expand I just want to master NC first. So any NC facilitators please come forth.
NEVER EVER hold real estate inside of a corporation. You will want an LLC or to use a partnership between you and a spouse/family/business partner. You can lose capital gain rates, and reduce your basis substantially if you use a corp.