Real Estate Attorney?

Question

Hello, I am new here to this website and must say it is the best. But I have a question before I run out and buy a "wholesale property". It is my understanding that I need to have some type of "Corp." before I do this because of the whole "taxes" thing. Can someone tell me what they think is the best (LLC, Corp, etc) to fall under? Lastly I also understand that you need to get an Attorney. What type of Attorney? And what questions should I ask when "interviewing" an attorney to ensure that I get someone who WILL look out for me. Thank you for all the help.

Very respectfully,

Derrick

Very respectfully,

Derrick

Michael Quarles · Answer

You dont need an attorney you need a tax guy first... They will guide you and the attorney can set it in place..

General rule is S corps if flipping and LLC is holding... and if flipping and holding them you'll need both...

What state,, in Ca it cost 130 bucks to file a corp...

the 800 buck is waived if you dont turn a profit your first year...

Attorneys are over rated... I have three on retainer and can say the dumber the better... The smart ones just arent that smart...

Bill Gulley · Answer

Setting up a business entity should be accomplished with care, IMO. An attorney, a good one, can assit in the following considerations and aspects as opposed to trying to accomplish this function on the cheap::
          
          1. Each state has different laws concerning real estate.
          
          2. Each person is unique in their personal financial position and other factors should be taken into consideration to map out a business strategy that not only acts as a conduit for real estate transactions but also addresses liabilty issues and asset protection for other assets.
          
          3. If there is no real issue with other personal assets at the inception of the entity, allowance should be made in the entity to expand without additional costs of modifications of the entity at later dates. Plan ahead and save money!
          
          4. While an accountant is a part of the business formation there can be issues of contingent liabilities that accountants are not trained in. For example, a young couple with limited resources that has a child with a disability may need additional asset protection strategies than another. Such a family may need to qualify for medical assistance until their income is sufficient to become self sufficient. Holding assets can disqualify them from benefits when they are trying to get their business off the ground.
          Your personal situation needs to be assessed to evaluate your business strategy.
          
          5. Do it right the first time. While any entity can be modified or amended, it's an expense that is not necessary if growing pains are forseen and provided for at the time of formation, you will save time and maybe avoid comliance issues.
          
          6. With various entities, they can be structured to admit special members, prefered and common stock holders, voting and non-voting members, and an endless variety of officers of employees. Without extensive business experience it is highly unlikely that a novice will provide for the flexibility, growth and liability protection between principals and officers with respect to other principals and officers. Liabiltu is not limited to protecting yourself from just the public, but from internal issues as well. A simple hold harmless recital does not always have the intended effect.
          
          Unless one is an attorney, it is never a good idea to tell someone they do not need an attorney. To say that someone may be able to establish a business entity without the services of an attorney might be a better approach, but consideration should be given to that person's abilities and knowledge, IMO. Care should be taken in selecting the proper entity and structure of an entity that allows the investor to direct and adapt to personal requirements, not an entity that dictates how the investor must transact business within a set of parameters. Thirty minutes with a good attorney and an hour with an accountant, can set you on the right track. IMO,

Mike, attorneys are over rated perhaps to those of us that have a great deal of knowledge and experience, not so with respect to those having limited knowledge. I know we all touch on legal aspects of investing, but unless we are attorneys, state certified as appropriate, we really need to watch what advise is given. IMO.  Bill

Bill Gulley · Answer

Hi, what kind of entity you establish is not based on just property transactions. You need to talk with a corporate/business attorney, anyone who deals in family law, trusts, estate planning and real estate will be able to do set up an appropriate entity. You also need to talk to a CPA or a good tax consultant familiar with business entities. You might find a tax attorney that does general business issues as well. This is an important issue, spend a few bucks and do it right, do your own due diligence to save time in front of a $500 per hour attorney! Good Luck, Bill

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