Has anyone started an LLC for flipping houses?

Question

I recently bought a new property and started renovation with a contractor. I plan on selling it and using the funds to buy another property to renovate. I was wondering if anyone has started an LLC to flip houses and has any tips on how to start one? Also what are the benefits of starting one?

Account Closed · Answer

To the titular question: Yes, tons of LLC's and businesses exist that flip houses.

Basit Siddiqi · Answer

@Craig ComstockLLC's can potentially provide tax relief by self-employment tax savings if selected to be taxed as an S-corp.However, be mindful that the tax savings comes with additional administrative tax burdens - S-corp tax return / payroll tax return.

Jonathan Bombaci · Answer

Yes we maintain our flipping company in a separate entity as our buy and hold properties. There are different risks to flipping a property vs holding long term and having some separation may save you a lot of heartache if something doesn't go the way you plan. The protections mostly revolve around liability like if you get sued by a contractor, buyer, tenant, or someone getting injured on your property.

They're super easy to setup. I don't know what state you are in but you can likely register it yourself for cheap at the treasury of state website. If its a single member LLC you don't even need an EIN number, no need to register with the IRS, since it's pass through and will go through your SSN. Per usual consult an attorney or tax professional for your individual situation.

Best,Jon

Monique Pett · Answer

Yes, all of my properties are in an LLC.

Brian Napierala · Answer

I think anytime you are dealing with investment property its a good idea to create an LLC.  Creating on is easy using a company like LegalZoom or the like.  An entity, basically, creates a limited liability between the property/ investment and you personally.  There are other benefits from an income/ tax liability that you could benefit from (I'd touch base with an accountant on that aspect).