I am strongly committed to buy my first investing property by end of May in Philadelphia area.
I would like to know what should be my very very first step. Should open an C Corp, LLC, LLLP, etc.? Before I make any offer?
I would also like to know what would be the best type of company for me if my goal is just to BRRRR?
@Sadio C. Unless you have substantial assets to protect ($1MM+) then I usually suggest not to form an entity and instead consider getting solid insurance. The insurance will be cheaper and easier to set up if everything is in your own name.
If you are risk averse and insistent on forming an entity, you will want to look at forming a LLC for a buy and hold strategy. LLCs are flexible for the owners and easy to manage.
Mostly I agree with Brandon. If you do form an entity a lawyer/best selling author in a webinar I recently watched recommended an LLC as the best and most flexible investment entity - covers the liability issues without compromising tax advantages or adding many layers. She also suggested that you probably only want to have about 5 properties in an LLC, before establishing another one for additional properties, but that number is flexible.
Thank you a lot Brandon and Larry. You've been very helpful. I am going to select a lawyer in Philadelphia area in order to set up an LLC.
Thanks again guys
I'd suggest listening to BP Podcast 109 and consulting an attorney. The podcast brings up some issues to consider regarding the creation of an entity as well as insurance concerns. Good luck and congrats on defining and pursuing your goals!
Thank you Lucas.
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