Buy as company asset or form a new company
Hello all,
I'm new to BiggerPockets and I'm planning to get into RE investing.
I have read through some of the threads and resources and the information provided by you guys is really valuable.
I have an IT company based in DC metro area.
Right now, we are leasing our space and we pay about $80K per annum for the lease.
Rather than leasing the property, I'm planning to buy a commercial space (preferably Class A building) for my business.
Could you please clarify the following questions -
1) Should I buy the a commercial property (Around $1.5Million with 10% down) or keep leasing?
2) If I decide to buy, I want to put down 10% down payment and SBA loan to finance the rest 90%. Any better options for financing?
3) Should I buy the property with the same company as company asset OR should I be forming a new company and hold the property in it's name.
Say, if my IT company is ABC, Inc., should I form a new company as XYZ holdings LLC and buy the property with XYZ holdings LLC and let ABC, Inc. pay the lease for it?
4) If I go with the above route, will banks finance the XYZ Holdings company?
My IT company is well established and my local bank has already agreed to finance the property.
5) I have been advised to hold the company real estate assets through another company, but not really sure about the pros and cons.
Eventually I'm planning to get into residential and commercial RE estate investing and was thinking to keep all my investment properties under XYZ Holdings LLC and I was thinking this Commercial property would be a good addition to start my XYZ Holdings LLC. Do you guys see any downsides of doing so?
Thanks in advance,
Kranthi