I am looking to invest with 2 family members. As we want to limit our liability we are looking to incorporate. What would someone recommend S Corp? a regular corp? We are looking to purchase 2 or more bldgs. Does that mean a separate corporation for each?
Also the states we are thinking about are CO, TX and AZ. Wha are the bk rules in each state? For example if the economy goes south and the corporation lets a property get foreclosed upon can they go after other bldgs owned by the corporation? I know that TX, for example, is pretty safe regarding this.
Eventually I will contact an atty regarding this but this is homework before I contact them.
Also I heard NV is a good state to incorporate in...
thanks in advance
First, never own rental properties in any type of corp. use either a LLC or a partnership of some sort. If you want to really be safe then put each property in a seperate entity so one can't affect the other. As for the question of bankruptcy, it will really depend on the type of mortgage that you get. if its non-recourse then the mortgagee can only go after the building that the mortgage is on if its recourse or you personally guarantee it then the mortgagee can go after other assets. you should talk to a lawyer about the loans.
Stuart Mordfin CPA
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