Newbie here getting ready to buy my first true rental property in CA. I am partnering with a seasoned broker who has successfully sourced several flips for me this year so he has earned trust and credibility.
The property is a manufactured home built in 2003 in Colton, CA 3/2 1500 sq ft that rents between $1300-1400 that we have under contract for $120k on a short sale. Property is in great shape and ready to fill with tenant.
Now for $60k I am buying into half of all rents and equity position.
I have 2 questions: What things should I be aware of with buy and hold with a manufactured home? It is newer...
Secondly, what is the best way to hold the property in terms of tax liability and also to protect my interests? S-Corp? LLC?
WE don't plan on disbursing rental income to each other very frequently. Instead we will just accumulate it all rental profits for 3-5 years until we can pull out to invest in more real estate.
Any advice for this situation will be greatly appreciated. We need to make a decision on this by mid august.
I believe an LLC with 2 members is the best way. Each of you owns 50%, and the taxes from the LLC pass thru to each of your individual income tax filings.
As for rental income, you should distribute it every year, because you have to pay tax on your rental income every year.
Thanks Andy! Do you have any thoughts on manufactured homes?