Posted by Bill K. (AZ) on July 28, 2000 at 20:29:54:
Tupac,
First of all, I’m not a lawyer.
It all depends upon how much risk you want to assume personally. A successful lawsuit against even the first property you acquire in your own name can destroy a personal financial plan.
It’s not a matter of numbers. It’s a matter of risk.
I hope this helps.
Bill K. (AZ)
How Many Properties Should You Own Before You Form an LLC or C-Corp? - Posted by Tupac
Posted by Tupac on July 28, 2000 at 16:44:33:
Should a new investor form an LLC or C-Corp before they buy their first investment property? How “big” should you grow your business before you seriously consider doing one of these?
Re: How Many Properties Should You Own Before You Form an LLC or C-Corp? - Posted by KennS
Posted by KennS on July 29, 2000 at 12:05:55:
Depends on what you plan to do with the property.
If you are buying it to resale or flip, you will end up paying more in taxes on the profit. You could have paid for the C-Corp and saved money.
In my state, it costs about $85 to file your articles of incorporation. It costs nothing to get your federal EIN number or bank account.
Why not buy a book (or library) with a step by step guide to incorporating in your state.
FYI - I spent less than $150 dollars setting up my C-Corp for my 2-million/year computer business. Do you think it is worth it? (my attorney would’ve charged about $600)
Now a confession. I still hold my long term rental properties under my name. I do plan on setting up LLCs & trusts in the future, but I haven’t. I have been converting them to lease-options and they will eventually sell. Any new properties I add for investment will go into an LLC, that is for sure.
I would not be buying properties I plan to sell quickly (within 12 months) without it being in a c-corp.
bogging down in useless details - Posted by RR Smith
Posted by RR Smith on July 28, 2000 at 20:30:30:
no, and quite big
An LLC or other corp. is good to have if you need an insurance firewall and your CPA cannot separate your personal from your business expenses. If you have less than $50K equity I would think it is a waste of time (other than future planning and thinking BIG),
DO ANOTHER DEAL AND STOP GETTING BOGGED DOWN IN DETAILS
(that would be good advise for me to).