Hello all, some friends and I are getting together so we can start flipping. I flipped a SFH in 2015, in S FL, and made a lot of money. But that home was purchased using an FHA loan and I lived in it. So now, we are looking to go again but this time as real flippers. I've been doing research on banks that loan for investment properties and I can't seem to find the actual bank names, (just type of loans). Does anyone know of what to properly search for or any actual banks that do real estate investment property loans for non-commercial real estate? The other thing, since we are really just starting out, is determining if we should create an actual company (LLC etc..) or if we should keep it in our names. But my friend that I am flipping with has a fair to good credit score (low 700s) but had a bankruptcy on his credit 9 years ago (I believe it has fallen off now). I, on the other hand, have an excellent cs rating. So we r not sure how this will affect anything. We also have 2 individuals that are private investors giving us money as well. Not enough money to buy property cash option, but enough money to get us through the reno. Should we get an CPA or just DIY?
Hey @Lisa Mohamed ,
When looking for a bank to work with I often try find recommendations, through similar methods as the BP forums, and just price shopping and talking directly to bankers. I often tell people who want to turn this into a business to try and talk to many of the local providers (banks, property managers, contractors, etc) for their specific profession to try and find if there is someone you would want to continue working with in the future. The single best qualifier for professionals I work with is that they personally invest in whatever deals I am looking into - those are the professionals who can really help you take your investing to the next level!
When it comes to investing, I often encourage people to invest through an LLC. If there is a situation where you are sued and your insurance refuses the claim, or the claim exceeds their policy, then the settlement or judgement can come out of your personal assets BEYOND the property itself. It becomes even more important when you are investing with a partner since it can impact both of your lives.
When you create a LLC within a partnership it provides a few different benefits. It protects from liability both FROM the investors (a lawsuit against you directly shouldn't impact the investments inside the LLC,) and TOWARD the investors as mentioned above. It also allows you to create an operational agreement that defines how the investment functions and the responsibilities of each investor. The LLC can help you when it comes to tax season, but it's primary function is to provide asset protection.
An experienced attorney would be able help draw this up to you. You can try do it DIY, but I have had to clean up LLCs from cleints who tries and failed to create an LLC - they were essentially paying and working for something that didn't actually work. It's better to pay a bit up front to ensure you are protected.
This isn't legal advice, just my opinion as a real estate investor.
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