Taxes and LLC or personal

3 Replies

Hello, 

I live in IL, I am a first time investor looking to start by Flipping a few homes to build capitol and to build a better relationship with my agent then from there in corporate the brrrr strategy.

I would like to know the tax rates, Federally and State, What percentage should I be using to put money away for taxes? 

Which is the best way to start, Personally or with an LLC?

I will be contacting an attorney just would like some insight before going that route. 

Any other insight you can give on legality before i get involved in my first flip would be great! 

Thank you greatly 

-Tyler

@Tyler Bell

Honestly, can’t you Google the tax rates yourself? We wouldn’t know your marginal tax rate without knowing your entire tax filing. Talk to a professional or two about preparing your quarterlyestimated tax and the Safe Habor rules

When starting on long term rentals, definitely do it personally. Get jnsurance on the property and an umbrella policy. The LLC thing comes up multiple times a day. Search around. I post on it constantly. The big sticker for most people this when you hold Title in the LLC, you have to use more expensive commercial lending

Good luck

@Tyler Bell

Your welcome

Oh, and for flips it pretty much would be to your benefit to operate under a LLC. However, you won't be able to get the cheaper conforming financing. However, that may not matter if you are picking up pretty distressed properties and are using hard money loans. Otherwise, just get commercial loans and pay the higher, but less than hard money, interest rates for the short time you have the property.

Good luck