All Forum Posts by: Adam Stone-dare

Sorry, my mom is a Shakespeare buff and she would be proud :lol:

So I was just about to go to the County Courthouse to file for an Assumed Name(DBA) but now I'm considering starting an LLC for multiple reasons and I'm curious as to what your opinions are.

A little about me:

I have not yet done a deal
I have been studying for some time and I'm ready to get started
I have every intention of doing this full-time but I will not quit my day job until it's a realistic possibility(1-3 years)
My only assets are my house which is homesteaded and a car with 100,000 miles and serious hail damage so I'm not concerned with asset protection at this point
I am interested in wholesaling/rehabbing(rentals in the near future)
I have $10K-$20K startup capital
I will be using Hard Money for my first several rehabs
I have excellent credit (771)

I am now thinking about starting an LLC in Texas(one-time $300 filing fee)
for my rehabs because I want to build up business credit and season my company so I figure I might as well start now.

Once I acquire rentals I will definitely setup an LLC but that is not an issue yet.

Given the information, should I form an LLC or just do my first few deals as a sole proprietor and then get my LLC?

If so, what is the most common method to tax the LLC? (i'm thinking s-corp)

How hard is it to purchase property for rehab in a new LLC?

here's a dumb question I feel like I should already know the answer to but do I need to purchase Business Insurance if I am going to rehab properties or just insurance for the actual rehab-builders risk, vacant dwelling?

What if a buyer decides for whatever reason that they want to sue me 2 years later?

Thanks for the advice. It's always appreciated when veterans take the time to educate us newbies.

:beer: :beer: :beer: :beer: :beer: :beer: :beer: :beer: :beer: :beer:

Thanks for your reply.

It's certainly not my preferred my method either but I would only use credit cards for short term debt that I know I can pay off and use my startup capital for anything else.

I haven't done a rehab yet but I'm ready get my feet wet.

Hello.

My plan is to start rehabbing in Texas and then acquire some SFR rentals and hopefully some multifamily.

I've decided against forming an LLC at this point because I have yet to do a deal and the only assets I have are my home which is homesteaded and a car with 100,000 miles and some serious hail damage. I have every intention of eventually doing REI full-time but I will NOT quit my day job until it's a realistic possibility.

I would like to start an LLC and start to build business credit but since I haven't done a deal it seems like a waste of money until I know I can do this.

I am going to file for an Assumed Name(DBA) with the County and open a business checking account for the $10K-$15K startup capital I have and also obtain a EIN so I don't have to use my SS#.

My question:

Is it okay to use my personal credit cards to cover rehab cost that will be reimbursed by my HML?

As a sole proprietor do I face any issues Doing Business As "newbie321" and then using MY personal credit? ( I think the answer is no since it all flows through to personal taxes anyway)

The reason I want to use personal cards is because I have good credit score(771), $27,000 worth of credit divided up over 3 cards all with ZERO balances and I don't want to give a personal guarantee for a new business credit card and harm my personal credit.

Any comments or suggestions are always appreciated. CHEERS :beer:

all_cash & beachbum,

thanks for your replies, they're always appreciated.

Since I have yet to do a rehab I guess I'm just fearful of liability issues as well as any issues I might face when trying to sell the house. With many lenders tightening up and me being on title for less than a year I just want to be able to justify the increase in price from what I paid for it.

I don't want some hard-*** inspector who pretends to be a code inspector pointing things out that might not meet code but are still safe and scaring a potential buyer.

How big of a liability is it if I get a new water heater without permits, it's not up to code, I sell the house, a year later it burns down the house due to faulty installation? Am I screwed? If I have records of permits and inspections I'm in the clear, right?

Thanks :beer:

Hello all!

Just a quick question about permits.

I plan on buying my first house to rehab real soon and I want to do most everything on the up & up. However, I don't want to get bogged down with "needless" permits.

In your opinion what are the most important permits?

TO me it seems that major repair/replacement is the most important:
1) water heater/plumbing
2) HVAC
3)Roofing
4)Electrical
5)foundation(I'm in Texas, terrible foundation problems)

Does that sound about right to you?

Thanks :beer: