NEED ADVICE ABOUT AN LLC

[Cody Skidmore]

Ive spent the last 2 years gaining as much knowledge as possible about Real Estate. Ive worked as a Mortgage Loan Officer for a few years, an Insurance Agent for quite sometime, I also have about 15 years of construction experience. However, Real Estate is what I'm passionate about. I absolutely love everything about it! After many declined offers on properties, I've finally got a solid deal on the table. My wife and I found a tax lien property in the county where we live. In a great neighborhood. Close to downtown, the hospital, and a few schools. This afternoon our bid on the property got accepted. The house is not move in ready by any means. We offered $20k with my estimate of $50k in renovations, which for this one I will do myself (with some help from friends and family). Luckily, I have the knowledge to complete the renovation with very little contracted help. Comps in the area run between $145K to $170K, with an average of $98/square foot. This property is on a corner lot and is 2000 square feet with a 680 square foot garage. Thankfully, my wife and I have the ability to pay for the house and renovations with cash. To maximize our tax deductions and utilize every write off we can we need to set up an LLC.. But when should we do that? The house is a flip and will most likely not be done by the end of 2018 so what type of problems will I run into at that point? Would they carry over to the next year? Can someone please offer some insight? Any help would be greatly appreciated regarding this time sensitive matter!! Thank you!

[Wayne Brooks]

There’s generally no tax advantage to an llc....there can be if you do a few flips in the same year, have the llc taxed as an Scorp so you can take a salary with rest not being subject to as/med, talk to a cpa, but that’s about it.
You won’t be able to deduct your repair costs this year, only carrying costs like property taxes, utilities, insurance, etc.