Investor · Metro Detroit · Member since 2018 · 14 posts · 3 votes
Example: a rental cost about $100k, my mom and I each contribute 50k to this deal. If we want to purchase it under my name solely, how do we get her portion of the fund transfer under my name? Can she simply wire transfer 50k to my bank account? Alternatively, do we need to set up an LLC and purchase the rental through the LLC? We don't need the LLC for asset protection but was wondering what will be the right way to do. Many thanks in advance!
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
6y
@KATHY H. lots of confusing questions here, but lets give this a try.
You and your mom are buying a rental for $100K in cash. She can just wire the funds to get this done. Is this a gift to you or will she own half?
Why would you not want to set up an LLC for liability protection? If you do I would suggest forming it in Wyoming (disregarded for tax purposes to avoid having to file a return) which will also give you privacy protection as well. However check the rules in your state on LLC's as in California there is a $800 annual fee that I pay for my LLC's. If that is the case then use a land trust that is owned by the Wyoming LLC.
Check with a tax accountant and structure professional in your state.
Investor · Metro Detroit · Member since 2018 · 14 posts · 3 votes
6y
@Joe Homs Thanks for your response! I apologize for the confusing question. Yes, my mom and I will be both contributing the money and having equity in the property. When presenting the offer (with the proof of funds), I think we will have my bank statement, my mom's bank statement, and a letter saying my mom is authorized to fund the deal?
The only reason I don't want LLC is that I have heard LLC is harder and more costly to get financing. I am just starting out so just want to keep it simple.
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
6y
@KATHY H. its not that the financing on an LLC is more costly, it's that traditional banks will not loan to the LLC and want it in your name. Once you accomplish this you deed it back to the LLC for liability protection.