First deal - deeds, corp structure timing, transfer of ownership
Hello - I just acquired an abandoned property (absentee owner), the current plan is to flip it. The longer-term plan is for my fiance and I to buy-and-hold with flips to build working capital. We have no corporate structures set up yet. A few questions regarding corporate structures, transfer of title etc.
This is a sub-50k house, estimated pre-tax flip profit is around $20k ($19,747 to be exact). Margin are clearly tight but I am using this more as a case-study and to learn the process.
We are currently in escrow as a FSBO deal. This is the plan for the current property acquisition:
1. Close escrow with title in my and my fiance's name (a single man /a single woman).
2. Concurrently, form an S-Corp, fiance and I will be 50/50 shareholders (S-Corp to minimize SET and limit personal liability) - to be used for this property and future flips.
3. Transfer property to S-Corp via a Warranty Deed or Quit Claim Deed.
4. All expenses and profits from the flip to be handled within the S-Corp.
So questions:
1. Am I on track with the above plan? Any feedback/suggestions?
2. My parents are loaning us the bulk of the money for acquisition/rehab and have asked this so reflected on a Deed of Trust. How does this fit in the above scenario and transfer of ownership (step 3)?
Apologies if this is convoluted - I've been giving myself a 24 hour crash course, so trying to get up to speed and still gaps in my knowledge.
Thank you!