Starting an llc in Illinois to get hard money loan and flip houses. Is there any reason to not have the purposes on article of organization be both general contracting and property investing? Name of the company would have the word "contracting" in the title. The llc would own the property and I would be the general contractor and also perform general carpentry. Do most hard money lenders prefer a contractor be involved? Thanks.
It all depends on your lender but if permits need to be pulled then yes a GC is going to be your best bet. I'd be cautious if you are not a licensed general contractor and having that in the name. They will likely double check to make sure that your LLC or whatever entity is active.
I don't know how it is everywhere but here a homeowner can get the required permit to do their own work on their house without a contractor, I guess I'll have to see how the village views it if owned by an llc.
Permits are very locale based.
Some will allow homeowner to pull a permit. Some will allow homeowner who lives in the residence (where a flip would need to be pulled by a contractor). Some don’t allow it at all. So really depends.
In the state of Illinois an LLC "MAY NOT" be the best choice. Even with the recent price drop an LLC is more expensive to own than any other business entity. For every entity other than a sole proprietor you MUST have an attorney represent the entity in all legal proceedings.
A single member LLC the LLC has only 90 days to decide and notify the IRS if it it wants to file income tax returns as a corporation on form 1120 or as a sole proprietorship which flows through to your personal tax return on schedule C.
A dual member LLC has no choice.
If it were me I would incorporate the company and make it the general partner of a Partnership or Family Limited Partnership. You and whoever you work with or marry would then be limited partners. Saying any more might sound like legal advice so I will stop here.
Get a good attorney that specializes in business entities. Your brother's nephews cousin who handles divorce and other family matters may be qualified, but they are not an expert in that field.
If you don't know a good law firm let me know and I can put you in touch with one. My contact information is below.
@Dennis Tynan feel free to reach out directly if you have any questions.
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