I just started talking to a homeowner about purchasing her home and what would be the best price if I get her Cash for her home.
If I want this unit to be a whole sale unit, what would be the next step and how would I go with opening an LLC For wholesaling?
Thank you for your answers!
You would need to find a flipper, or buy and hold investor. You can find them at local real estate investment meetups. Setting up a LLC in Louisiana would depend upon the laws you could google it or go to mycorporation.com or legal zoom. They will be able to answer more of your questions specific to your state.
Your state website should have a link or info for establishing a business with the secretary of state. Formation costs should be outlined there. Most states require you to do quarterly tax reporting. Sure you need an LLC to wholesale?
You can set up LLC through the LA Secretary of State website. Cost is $75. You don't need the LLC to wholesale though.
Best thing for you to do is speak with a real estate attorney who is knowledgeable about investing and wholesaling in particular. Call David Birdsong at Gulf South Title. If you are a member of NOREIA he will give you a free consultation. http://www.gulfsouthtitlecorp.com/
If you are not a member of NOREIA, then you should be. See here - http://neworleansreia.com/
Thank you Braden... if I take the rent to own method, do you think it's better to open an Llc ?
thank you steve and Jonathan for your answers... I guess I don't an LLC to wholesale
Hey @Moe Salem ! Welcome to BP!
The price to set up an LLC in LA went up last year. It costs $100 for the initial filing and then $35/year after that. It's extremely easy and can be done in minutes.
There are advantages to choosing to have your LLC taxed as an S Corp for flipping/wholesaling, but that's a conversation that you need to have with your tax and legal advisors. You need to make the selection of whether to be taxed as a pass through entity or as an S Corp at the time you create your Tax/Employer ID Number (TIN/EIN).
I would also recommend you contact David Birdsong. He's an attorney who I would consider a subject matter expert on REI.
There's plenty of money to be made in the future, if you intend to work on your own. IMO, you should partner with someone local with experience to make sure you do things right for this deal and share the profits or be happy with a birddog fee.
definitely I will have to look for a partner
The answer to the question in the headline is simple. It's a $75 filing fee with the secretary of state and you can file online on the secretary of state website:
Now for the questions not asked but implied... Do you need an LLC for your wholesaling business?
The purpose for an LLC is to protect your personal assets from any liabilities initiated from normal operation of your business. IMHO $75 is a cheap insurance to shield your home and savings from anything that may go wrong within your business.
Just my 2 cents on the subject. If your holding real estate there will be more risk for lawsuits than there will be in wholesaling. However, Wholesaling still involves contracts and money changing hands and one of the main reasons that we use contracts is that people make agreements and then change their mind later and then a lawsuit can occur. Therefore a "Wholesaling" business is not free from liability even though you will not be holding on to the property. This would be a good discussion for your Lawyer on whether you should form an LLC or not.
From a tax perspective the LLC is a flow through entity and files no tax return on it's own so it will not help or hurt you on the tax side.
I'm neither a CPA nor an Attorney and both should probably be consulted on this matter. This is just my opinion based on the information that I have researched in setting up my business.
thank you jeff
Even if you are not a member of NOREIA, David Birdsong will give you a free consultation. I called and asked him a random question about La Tax Sales and it turned into an hour conversation. That conversation alone motivated me to become a member of NOREIA. Mr Birdsong is an invaluable resource.
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