I am looking for advice on the best way to protect my legal liability as I buy and hold investment properties for cash flow purposes. I am looking at starting on the residential 1-4 family side. Which entity should I go with and should I use 1 entity for all properties or set up an entity for each property?
Your best bet is to hire a lawyer and/or CPA and talk out all your options. That way you know you filed the proper paperwork for whatever entity you decide on.
I am a tax accountant and have a little insight into these entities. Whatever business you decide on, you will need to protect yourself from any potential liabilities . If you want to set up a sole-proprietorship you should become a single member LLC. You can also setup an LLC that's taxed as a S-corp. Both of those entities may sound similar but they are different in how they tax income. That's why I suggest you meet with a lawyer or CPA to go over what works best for you.
This is a good question for your lawyer. Good luck.
I will search up key terms like "LLC" , "Sole proprietorship" , "entity" etc. on BP and start reading. You will gain a lot of information and at the same time you will find questions that you should be asking when you consult your CPA/Lawyer.
Thanks so much all! I look forward to getting to know you through the BP site.