What is your preferred LLC Structure for Fix & Flips?
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Attorney · Spanish Fork, UT · Member since 2025 · 77 posts · 97 votes
1yHi @Damon M., congrats on getting started in real estate investing. When it comes to business and tax structuring for fix and flips there are several things to keep your eye on, especially as you expand you build out and expand your investment activities.
First, I would second the comments of others that having an entity (e.g. an LLC) where the operating documents (bylaws for a corporation or an operating agreement for an LLC) clearly outline the partner's respective rights and obligations, allocation of profits and losses, taxation, dispute resolution procedures, exit strategy, etc. Hire a good attorney to assist with this process.
Second, think about your long-term goals and discuss these with your partner's as these can effect how you want to structure from the outset. For instance, if you plan on partnering on several flips with the same partners then there may be good reason start out using a holding/parent LLC to serve as the partnership entity for any/all LLCs setup for individual flips as this can reduce the number of tax returns your filing every year and thereby make your tax filings more efficient.
Similarly, there may be good reason to consider S or C-corp taxation (can be a true corporation or simply an LLC taxed as a corporation) for a couple of reasons. First, this may be more tax efficient than simple partnership taxation because income from flipping is considered active income and thus is hit with both ordinary income taxes and FICA/self-employment taxes. Corporate taxation such as S or C can help you minimize your tax liability depending on your goals.
Second, if you plan an investing into long-term hold real estate, such as rentals, then corporate taxation on your flips has the huge added bonus of preventing you personally from being tagged by the IRS as a real estate dealer. In a nutshell, when you are engaging in frequent flipping and/or wholesaling real estate activities, the IRS can tag you as a Real Estate Dealer which can cause you to lose out and numerous very powerful tax tools available to your long-term hold investment real estate such as 1031 exchanges, cost segregations, etc. Doing your flipping and wholesaling activities through a corporation (which is a separate taxable entity from you personally) will prevent you from personally being tagged as a dealer thereby preserving these tax tools for you.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
35 Replies
- 1yErik EstradaBusiness MemberLender · Member since 2022 · 6k+ posts · 1k+ votes
Is this purely for tax advantages or are you looking to structure the LLC according to lending guidelines to help you obtain finnacing?
LuxePrivate Investments LLC 572 Reviews - Lender · NC · Member since 2024 · 344 posts · 115 votes1y
Hi Damon,
Congrats on starting your first fix & flip! For your LLC structure, many investors use an LLC for each flip to separate liability and keep things clean financially. Having clear operating agreements with your partners is key to avoid any future headaches.
Since you're using hard money plus your own funds, make sure your lender is clear on who's on the LLC and how funds flow. For tax savings, consulting a real estate CPA can really help optimize your setup.
- 1yDamon M.Real Estate Agent · Atlanta, GA. · Member since 2024 · 12 posts · 8 votesOP
@Deborah Wodell This is great info! Thanks
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes1y
@Damon M.
You will need an attorney to draft your operating agreement stating how profits are handled, how losses are allocated, and who is responsible for what. I.e. One of my flips was with a partner. I put up 2/3 of equity, he put up 1/3. He handled all project management. As such, if we took a loss, losses were allocated 2/3, 1/3 like equity invested. Profits were split 50/50, given he handled effectively all the day to day work.This is just one way, based on my financial commitment and responsibilities versus partner's. I have also seen them where a financial partner gets 10% annualized return or 30% of profit, whichever is greater. This investor had no real say in the deal: a builder sourced it, performed all work, did all design, etc. Investor just wrote a check to cover purchase and reimbursed for all labor and materials.
- 1yDamon M.Real Estate Agent · Atlanta, GA. · Member since 2024 · 12 posts · 8 votesOP
@Evan Polaski Thanks Evan!
- Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes1y
@Damon M., Since it's your first deal, I'd recommend forming a basic multi-member LLC with an operating agreement that clearly spells out each person's ownership, capital contributions, responsibilities, and how profits (or losses) will be divided. It doesn't have to be overly complicated, but you definitely want everything agreed upon in writing before money starts moving.
Since you're planning to use hard money and some of your own funds, make sure you're clear about who's on the loan, how everyone gets repaid, and whether any partner receives a preferred return—especially if one of you is more passive.
As far as taxes go, most individuals in your position keep it simple and structure the LLC as a pass-through entity (such as a partnership). That usually works fine for your first couple of flips. Once you achieve a higher volume, a CPA might suggest a more advanced setup, but wouldn't overcomplicate it just yet. - Attorney · Spanish Fork, UT · Member since 2025 · 77 posts · 97 votes1y
Hi @Damon M., congrats on getting started in real estate investing. When it comes to business and tax structuring for fix and flips there are several things to keep your eye on, especially as you expand you build out and expand your investment activities.
First, I would second the comments of others that having an entity (e.g. an LLC) where the operating documents (bylaws for a corporation or an operating agreement for an LLC) clearly outline the partner's respective rights and obligations, allocation of profits and losses, taxation, dispute resolution procedures, exit strategy, etc. Hire a good attorney to assist with this process.
Second, think about your long-term goals and discuss these with your partner's as these can effect how you want to structure from the outset. For instance, if you plan on partnering on several flips with the same partners then there may be good reason start out using a holding/parent LLC to serve as the partnership entity for any/all LLCs setup for individual flips as this can reduce the number of tax returns your filing every year and thereby make your tax filings more efficient.
Similarly, there may be good reason to consider S or C-corp taxation (can be a true corporation or simply an LLC taxed as a corporation) for a couple of reasons. First, this may be more tax efficient than simple partnership taxation because income from flipping is considered active income and thus is hit with both ordinary income taxes and FICA/self-employment taxes. Corporate taxation such as S or C can help you minimize your tax liability depending on your goals.
Second, if you plan an investing into long-term hold real estate, such as rentals, then corporate taxation on your flips has the huge added bonus of preventing you personally from being tagged by the IRS as a real estate dealer. In a nutshell, when you are engaging in frequent flipping and/or wholesaling real estate activities, the IRS can tag you as a Real Estate Dealer which can cause you to lose out and numerous very powerful tax tools available to your long-term hold investment real estate such as 1031 exchanges, cost segregations, etc. Doing your flipping and wholesaling activities through a corporation (which is a separate taxable entity from you personally) will prevent you from personally being tagged as a dealer thereby preserving these tax tools for you.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
- Investor · NY · Member since 2022 · 42 posts · 31 votes1y
@Ryan Coon this is helpful! so are you saying creating an s-corp will help to not get tagged as a dealer, rather than an LLC?
im also working on my first flip and looking into the best way to structure the arrangement between my partner and i. i have a long term rental but its in my personal name.
- Attorney · Spanish Fork, UT · Member since 2025 · 77 posts · 97 votes1y
Quote from @Molly Paprota:
@Ryan Coon this is helpful! so are you saying creating an s-corp will help to not get tagged as a dealer, rather than an LLC?
im also working on my first flip and looking into the best way to structure the arrangement between my partner and i. i have a long term rental but its in my personal name.
Yes, flipping in an S-corp or a C-Corp will help prevent the IRS from tagging you as a real estate dealer. However, this does not mean that you can't use an LLC because you can have your LLC opt to be taxed as an S-corp or a C-Corp by filling a simple tax form for the LLC so talk talk to your CPA or attorney about making this election.
- CPA| New Clients Welcome| 50 States · Member since 2016 · 430 posts · 93 votes1y
@Damon M., hi. Great question! I assist real estate investors across different states with entity structuring, tax strategy, and compliance—especially for fix & flips like yours. The way you structure your LLC can definitely impact both liability and tax outcomes, especially with partners and hard money involved. Happy to connect and share some insights based on what's worked best for other clients in similar setups.
- 1yAaron ZimmermanBusiness MemberAccountant · Chicago, IL · Member since 2018 · 2k+ posts · 1k+ votes
I've seen investors structure fix and flips as a holding company with the two members and have each property flipped have its own LLC. Definitely speak with an attorney AND CPA to make sure you're totally aligned. The structure also depends on your objectives.
Brick House CPAs53 Reviews - Specialist · NJ · Member since 2022 · 1k+ posts · 649 votes1y
The tax implications of working out of an LLC is the self employment tax of 15%. So you pay your normal fed income tax - let's say is 22% and then you pay that 15% self-employment tax. So that's why flipping out of an LLC is a lot of tax, can be up to 40% depending what income tax bracket you are in.
To avoid the 15% self-employment tax, you can file an S-Corp declaration with the IRS. An S-Corp is an LLC that is taxed as a corporation and that corporation can have employees who are the members.
So now, let's say you flip a house and make 50k. That 50k at closing is deposited into the LLC/S-Corp account. The one stipulation for an S-Corp is to have a payroll company. They are not expensive. Like 75 - 100/month.
When your first profits enter, you send yourself something consistent. Like 2k/month and you keep that cycle. The IRS wants to see routine paychecks if you file this way.
But once you are sending yourself the cycle checks, you can always make up a one-off check and send it to yourself on top of the cycle checks. It's a bonus, or overtime, a raise.
But if you do it that way, you will only pay whatever your tax bracket says, no extra self-employment tax.
Anyone making money out of a straight LLC, please understand you are responsible for that 15% self employment tax.
- 1yDamon M.Real Estate Agent · Atlanta, GA. · Member since 2024 · 12 posts · 8 votesOP
Thanks @Michael Dumler
- Wholesaler · Member since 2024 · 99 posts · 39 votes1y
Quote from @Damon M.:
Thanks @Michael Dumler
Hey Damon are you buying flips yourself in the ATL market? I am looking to add to my buyer list some.
- 1yDamon M.Real Estate Agent · Atlanta, GA. · Member since 2024 · 12 posts · 8 votesOP
@Mike Klarman I really appreciate the insight Mike!
- 1yAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
@Damon M. Great question and it’s smart to plan your structure before jumping into your first fix & flip. Since flips are considered an active business (not passive investing like rentals), the setup has big tax and liability implications. Here’s how to approach it:
- LLC Formation: Set up a multi-member LLC taxed as a partnership to get liability protection and flexible profit-sharing. Make sure you draft a solid operating agreement that outlines ownership percentages, capital contributions, responsibilities, and profit splits. (We can provide a downloadable template to get you started.)
- Tax Treatment: Fix & flip income is taxed as ordinary active income, not capital gains, and it’s subject to self-employment tax (15.3% on top of your income bracket). This is a key difference from rental properties.
- S Corporation Threshold: If your flipping business generates significant profit (generally $50K+ net income annually), consider having your LLC elect to be taxed as an S-Corp. This allows you to pay yourself a reasonable salary and take remaining profits as distributions, potentially reducing self-employment taxes. A real estate CPA can guide this transition.
- Deductions: You can deduct most of your expenses—hard money loan interest, contractor costs, materials, utilities, property taxes, insurance, etc. in the year the flip sells. But be ready for a tax hit on all net profit in that same year unless planned ahead with estimated payments.
- CPA & Bookkeeping: Use a real estate-savvy CPA to help set up proper bookkeeping, project tracking, and quarterly tax estimates. Flips move fast, and tax surprises can be brutal if you don’t plan in advance.
- Entity Strategy: Keep flips and rentals in separate entities. Flips are treated as inventory (subject to business income tax), while rentals are investment property (with depreciation and different tax treatment). Mixing them can create reporting headaches and risk IRS reclassification.
This structure gives you flexibility, protection, and the ability to scale intelligently.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.
INVESTOR FRIENDLY CPA®5241 Reviews- Woodbridge, NJ · Member since 2017 · 1 post · 0 votes1y
Quote from @Ashish Acharya:
@Damon M. Great question and it’s smart to plan your structure before jumping into your first fix & flip. Since flips are considered an active business (not passive investing like rentals), the setup has big tax and liability implications. Here’s how to approach it:
- LLC Formation: Set up a multi-member LLC taxed as a partnership to get liability protection and flexible profit-sharing. Make sure you draft a solid operating agreement that outlines ownership percentages, capital contributions, responsibilities, and profit splits. (We can provide a downloadable template to get you started.)
- Tax Treatment: Fix & flip income is taxed as ordinary active income, not capital gains, and it’s subject to self-employment tax (15.3% on top of your income bracket). This is a key difference from rental properties.
- S Corporation Threshold: If your flipping business generates significant profit (generally $50K+ net income annually), consider having your LLC elect to be taxed as an S-Corp. This allows you to pay yourself a reasonable salary and take remaining profits as distributions, potentially reducing self-employment taxes. A real estate CPA can guide this transition.
- Deductions: You can deduct most of your expenses—hard money loan interest, contractor costs, materials, utilities, property taxes, insurance, etc. in the year the flip sells. But be ready for a tax hit on all net profit in that same year unless planned ahead with estimated payments.
- CPA & Bookkeeping: Use a real estate-savvy CPA to help set up proper bookkeeping, project tracking, and quarterly tax estimates. Flips move fast, and tax surprises can be brutal if you don’t plan in advance.
- Entity Strategy: Keep flips and rentals in separate entities. Flips are treated as inventory (subject to business income tax), while rentals are investment property (with depreciation and different tax treatment). Mixing them can create reporting headaches and risk IRS reclassification.
This structure gives you flexibility, protection, and the ability to scale intelligently.
This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.Would you be able to send me a copy of that template
I too am in a similar boat. I am looking to transition to fix and flips for additional income since I already have a few LTRs. My challenge is trying to find a good starting template for the Operating agreement so I can have an educated discussion with my partners/investors ahead of talking to a real estate attorney.
- 1yKristen AmbroseBusiness MemberAccountant · FL · Member since 2024 · 78 posts · 34 votes
Congrats on getting started. For your first flip, keep the structure simple and clear. A basic LLC with an operating agreement that outlines ownership, roles, and how profits will be split is a solid start. Since you're using hard money and your own funds, make sure everything is documented — especially who's putting in what.
For tax savings and setup, talk to a CPA before you close. It’s worth the time to get it right up front. Happy to connect if you need a referral.
Ambrose Bookkeepers531 Reviews - Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes1y
I do not flip on an LLC but in my own name. I only use private money.
when you flip in an Llc it signals to buyers that you are a flipper. This doesn't happen when you sell in your own bame- Attorney · Spanish Fork, UT · Member since 2025 · 77 posts · 97 votes1y
Quote from @James McGovern:
I do not flip on an LLC but in my own name. I only use private money.
when you flip in an Llc it signals to buyers that you are a flipper. This doesn't happen when you sell in your own bameThe downsides of this approach are:
(1) there is no legal separation between you and the flipping activity meaning that liabilities of the flipping can easily expose your own personal assets such as your home;
(2) your likely getting hit much harder on taxes by foregoing corporate taxation; and
(3) you are exposing yourself to being tagged as a real estate dealer and thereby losing out on 1031 exchanges, cost segs, etc.
If your running into problems acquiring the property directly in an entity like an LLC, then a good workaround could be to acquire the property in your own name, then transfer to the LLC thereafter. This could get you the best of both worlds for just the price of one additional deed and you should be able to get around any private lender objections with a personal guarantee.
- Flipper/Rehabber · Bloomfield CT · Member since 2020 · 1k+ posts · 408 votes1y
@Ryan Coon buying in your name and transferring to an LLC adds unnecessary costs. In Connecticut every transfer is taxed at three percent.
not getting taxed harder by avoiding corporate taxation. It works out to the same over time. Having to file only one tax return instead of multiple saves on time and costs for preparation
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
@Damon M. most people believe that "Flipping is best in an LLC taxed as an S Corp.
The reason is that flipping is earned income subject to FICA (social security tax {14%]) With an S Corp some of your income can be a salary subject to the FICA tax and some can be a "Dividend" which is NOT subject to FICA tax.
I think @Ryan Coon has said some things that might be misleading. Most accountant swill say that holding real estate in a C Corp is a terrible way to hold property. I don't believe having an S Corp stops you from becoming a "Dealer" or not, but flipping is earned income and taxed as such whether you flip in your own name, an LLC or an S Corp LLC
"Doing your flipping and wholesaling activities through a corporation (which is a separate taxable entity from you personally) will prevent you from personally being tagged as a dealer thereby preserving these tax tools for you."This in no way stops the Corporation being taxed as a Dealer. A standard C Corp is subject to double taxation, depreciation is not pass through, transferring property out of a corporation is a taxable event. This is why you don't go to a lawyer for tax advice and don't go to a CPA for legal advice.
Ryan Coon may know better but the way he has expressed his advice could cause an investor to make some bad choices. I am not an attorney nor a CPA. Please as Ryan implies you should seek professional legal advice for your specific situation.
- Attorney · Spanish Fork, UT · Member since 2025 · 77 posts · 97 votes1y
Quote from @Ned Carey:
@Damon M. most people believe that "Flipping is best in an LLC taxed as an S Corp.
The reason is that flipping is earned income subject to FICA (social security tax {14%]) With an S Corp some of your income can be a salary subject to the FICA tax and some can be a "Dividend" which is NOT subject to FICA tax.
I think @Ryan Coon has said some things that might be misleading. Most accountant swill say that holding real estate in a C Corp is a terrible way to hold property. I don't believe having an S Corp stops you from becoming a "Dealer" or not, but flipping is earned income and taxed as such whether you flip in your own name, an LLC or an S Corp LLC
"Doing your flipping and wholesaling activities through a corporation (which is a separate taxable entity from you personally) will prevent you from personally being tagged as a dealer thereby preserving these tax tools for you."This in no way stops the Corporation being taxed as a Dealer. A standard C Corp is subject to double taxation, depreciation is not pass through, transferring property out of a corporation is a taxable event. This is why you don't go to a lawyer for tax advice and don't go to a CPA for legal advice.
Ryan Coon may know better but the way he has expressed his advice could cause an investor to make some bad choices. I am not an attorney nor a CPA. Please as Ryan implies you should seek professional legal advice for your specific situation.
Thank you for your thoughts @Ned Carey. While an S-corp or an LLC taxed as an S-corp may be a good starting point for many when getting involved in flipping, there are some distinct advantages to a C-corp that, depending upon the individuals circumstance and goals, may make the C-corp well worth considering. For example, if the primary goal is to simply reinvest income from one flip into the next, then C-corps can actually decrease tax liability because C-corps, unlike S-corps, are not required to distribute income. Instead income can remain in the C-corp and be invested directly from the C-corp into the next flip. When doing things this way the income is only hit with taxes once, namely the corporate tax at 21%. This income is not hit with the second layer of taxation (dividend taxes) because you never actually paid yourself dividends, thereby avoiding the infamous double-taxation.
There are other advantages to C-corps like the ability to tax tax-free reimbursements for out-of-pocket medical expenses or the ability to more readily write off education expenses.
I work with a full team of tax advisors, tax attorneys, and CPAs who specialize in tax planning and tax strategies for real estate investors and you would be surprised how often a C-corp may serve as well or better than an S-corp. However, as mentioned it is always a wise idea to speak with an CPA or other tax professional when making these types of decisions because individual circumstances and goals will influence what is going to serve best.
As to being tagged as a real estate dealer, using either an S-corp or C-corp does prevent you from being tagged as a dealer personally, but does not prevent the corporation itself from being tagged as a dealer. This means that if you keep your long term hold real estate separate and distinct from the corporation doing the flipping, then you still have access to 1031 exchanges, cost segregations, etc. for your long-term hold investment real estate.
Lastly, transferring real estate out of an S-corp is a taxable event, just like transfers out of a C-corp so this is not a problem unique to C-corps. This is why it is almost never a good idea to use a corporation, C or S, or even an LLC taxed as a C or S corp to hold long-term hold real estate like rental properties. Flipping real estate is typically one of the exceptions to this because the income is active and you are not holding long-term.
Note: This information is for educational and informational purposes only and does not constitute legal, tax, or financial advice. No attorney-client, fiduciary, or professional relationship is established through this communication.
- New to Real Estate · Miami, FL · Member since 2024 · 1k+ posts · 446 votes1y
Hey Damon,
For a fix & flip with partners, a multi-member LLC taxed as a partnership is usually the way to go. It allows flexible profit splits and pass-through taxation. Just make sure your operating agreement clearly outlines roles, contributions, and payouts. Since flips are taxed as ordinary income, a CPA can help fine-tune things for tax efficiency.
- 1yThomas FranklinPro MemberReal Estate Investor · Miami, FL · Member since 2010 · 939 posts · 739 votes
I would strongly suggest you establishing a Corporate Entity such as a S Corp or a LLC. This is a relatively inexpensive process. I invite you to Google "Creating a LLC or S Corp in _____," "Division of Corporations in _____," or another phrase. You can go to http://www.sunbiz.org and see how Florida does things, to give you an idea what to look for, in a website. You also need a well crafted Operating Agreement by a Real Estate Attorney that specifies in great detail the Corporate Structure, how the business is to operate, “what if contingencies” such as divorce, etc.
If you are partnering, with other people or Corporate Entities, I encourage you to have a detailed Joint Venture (JV) Agreement. In any Joint Venture, the ultimate goal should be to create a Win-Win Situation. It is important to know and understand the needs, of your Joint Venture Partner. All Vested Parties should feel comfortable and happy, when everyone leaves the Closing Table. Be sure to “Paper Up” meaning everything is in writing, with Ironclad Agreements. If you and your Joint Venture Partner will be forming a Corporate Entity together, you will need to have an Operating Agreement crafted. All documents should be created, by a Real Estate Attorney.
Create a Joint Venture Agreement that specifies the following: Recitals; Rights, Duties, and Responsibilities of each person/ entity entering into the agreement (Who will pay for what to include, but not limited to any down payment, holding costs such as Property Insurance Premiums, Utilities, HOA Fees if any, Rehab Materials, Contractor Labor, Loan Payments, etc.). Also included should be the Percentage of Profit Split (after all parties involved are made whole). I would include two Addendums. Addendum A would be a detailed Scope of Work and Addendum B would contain the Property's Legal Description as specified in the County's Public Records.
Each party should keep all their invoices, receipts, credit cards statements, etc. to substantiate the amount one claims, for reimbursement, when the HUD-1 is drafted, for the backend closing, by the Title Company. This documentation will need to be submitted, to the backend Title Company, to justify reimbursement for project expenses incurred, by the Joint Venture Parties.
I invite you to please consider the following, from a Federal Income Tax Filing Perspective. I cannot stress the importance of finding a very good Investor Friendly CPA. Below are some things you may wish to consider, as to which Corporate Enity is best, for your Business Model as well as your REI Goals and objectives.
Flipping Properties
If the primary objective of your real estate business, or one of your real estate businesses, is to buy, potentially fix up an existing property and resell it within one year, the Internal Revenue Service can consider that to be an active trade or business. Unlike passive rental income, the income from an active trade or business is subject to self employment tax is nasty. If your goal is to reduce that self-employment tax to a minimum, an S Corporation is the best entity to use. Why?
It is the only entity structure whose rules allow the business owner to take a "reasonable salary" (subject to social security and medicare) and then take the remaining profit (often as much as 50% of the remaining income) out as distributions not subject to self-employment taxes. Correspondingly, all business income taken from an LLC under similar circumstances is subject to self-employment taxes.
Holding Properties
When holding properties as a cash flow investor, the LLC (or LP) is generally the better choice because an LLC has more liberal distribution rules. The key here is flexibility. LLC distributions come out of the LLC at cost basis. The members of an LLC are issued K-1 Form and have to pay taxes on all profits as though it were income, which could expose the owners to high employment taxes. Also, an LLC can elect to be taxed like an S Corporation.
While there is never only one answer that is correct for all circumstances, there is a general rule that is almost always the correct choice. So remember, for legal and tax planning, a good CPA will recommend that clients hold their properties in an LLC or Limited Partnership and run their businesses as S Corporations to avoid self-employment taxes.
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes1y
@Damon M. As you can see there are many options and recommendations. I suggest NOLO Press for their self help legal books. They have multiple books on LLCs and Corporations.
While I don't recommend you do this yourself without legal help, reading and educating yourself about the issues will help you work better with attorneys and CPAs. It will probably save you money as they will spend less time explaining basic issues.
- 1yDamon M.Real Estate Agent · Atlanta, GA. · Member since 2024 · 12 posts · 8 votesOP
Thanks @Ned Carey 👌
- 12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes1y
A cpa or attorney will be the best to advise . Also depends on everyone's responsibilities in the llc
- 1yBasit SiddiqiBusiness MemberAccountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
If you plan to use a hard-money lender, you want to see what their requirements are to be able to lend. They are normally very speific.
Most of the time, they will want an LLC to lend to.
It shouldn't be hard to create an LLC. Have an attorney draft the operating agreement with all the partners / members present so everyone understands what the rules / stipulations are.
You can have a conversation with an accountant to see if there are potentially some savings with an S-Corp setup
Best of luck!
Basit Siddiqi CPA4.979 Reviews - 1yKristen AmbroseBusiness MemberAccountant · FL · Member since 2024 · 78 posts · 34 votes
Hey Congrats on getting started That first flip is a great way to learn
I'm a real estate bookkeeper and investor and I've seen a lot of setups The cleanest way is to set up a separate LLC just for this project That way everything stays organized and it's clear who owns what and how profits are split
If it's more than one person you'll need a partnership tax return Make sure you open a bank account for the LLC and run all money in and out of there including your funds and the hard money loan
Also make sure you’re tracking everything from day one That means what each of you put in what you spend and what you make This makes tax time a lot easier and helps you see if the deal made money
Flips are taxed as regular income so keeping clean books helps you catch every deductible expense
Let me know if you want help getting the books set up I do this every day for real estate investors
Good luck with the flip
Ambrose Bookkeepers531 Reviews - Member since 2025 · 1 post · 1 vote1y
Look into Anderson Advisors they can set you up for sucess Business and Tax wise as well as legal representation. I just did a webinar with them yesterday all day they are amazing. They can set up your whole LLCS Corp. C Corp. whatever correct work as you're registering agent and you get all the legal advice you need. They can save you a ton of money on taxes, too
- 1yJake YuskaitisBusiness MemberLender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
Wyoming trust
wyoming trsut owns a wyoming llc
wyoming llc own the domestic llc of the state you are operating in
Frontier Funding LLC533 Reviews - Real Estate Broker · Belmont, MA · Member since 2025 · 150 posts · 65 votes1y
@Damon M., congrats on taking the first step with your brother. The LLC part is pretty simple but the key is having a clear operating agreement that spells out how money is split, who makes what decisions, and how you handle surprises. Many first timers skip that and it causes problems later. As for taxes, it is best to have a CPA look at your setup so you know if a partnership LLC or another structure makes the most sense. The main thing now is to keep the paperwork clean and make sure all money flows through the company so there is no confusion later.
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