Rental Property Investor · Portland, OR · Member since 2018 · 45 posts · 10 votes
A friend and I were going to try to flip a house for the first time and I was wondering the best way to go about it. Is it beneficial for us both to start an LLC or should we just have the mortgage in both of our names? Thanks again BP!!!
Accountant · We serve all 50 states · Member since 2015 · 90 posts · 50 votes
8y
Me and my husband (my boyfriend back then) did our first flip together without an LLC and then we opened one after we decided to keep doing it. There are certain benefits of starting an LLC (legal protection of your assets, with a proper structure - some tax savings, etc.), but there are also costs and time required, so I would advice to start as a partnership, and form an LLC if you decide to keep doing it on a regular basis. There are costs and paperwork required to open an LLC, to open a bank account for an LLC, to close an LLC. Just keep that in mind.
Are you planning to get a conventional mortgage or a hard-money loan?
Rental Property Investor · Portland, OR · Member since 2018 · 45 posts · 10 votes
8y
Originally I was planning on going with hard money but those monthly payment kinda made me think I need to just go conventional. I actually just came across a guy that’s going to let me do zero down. But it will have a 5.6% interest so I think that is going to be the way to go for me.
San Francisco, CA · Member since 2018 · 11 posts · 1 vote
8y
Hi Sean,
What state will you be doing a flip in? Is this a one off deal, or do you want to do a few RE investments this year? I think using an LLC is advisable, especially if the rehab will be somewhat extensive. Best to do so in order to protect your assets.
If you found someone willing to do 0% down, 5.6% interest that is pretty hard to be. Is this a private lender? Connection from friend or family? Be cautious of hidden fees!
New to Real Estate · Teaneck, NJ · Member since 2018 · 167 posts · 60 votes
8y
I think the LLC route is the way to go if you believe this is something you will be doing in more than one property. Also keep in mind many private lenders wont lend unless your an LLC.
Investor · Columbus, OH · Member since 2015 · 625 posts · 601 votes
8y
@Sean Rhodes I'd be very careful working with a lender that says they will go 0 down on an investment property loan. Don't put any money down up front.