Hi Cre,
I bought one property and sold it before incorporating. Then I incorporated 2 days before going to buy my second property. I remember the closing agent calling me to ask what name to put on the paperwork!
But if I had to do it again, I’d inc. before the first property was purchased. I had ordered Bill Bronchick’s course Bulletproof Corp. in order to learn how to keep the minutes, etc.
Just get your ducks in a row the first time, and file that sucker. There are tons of places on the net that will inc. you for around $99 plus your states fees. Do a search for the words “incorporate online” and you will see how many there are. Or you might look in your local daily newspaper under “Legal Services”.
My feeling is, Inc. in your home state. If you don’t live in Delaware but you Inc. there, you get to pay double fees to your home state plus Delaware to keep all that mess up. Just my 2 cents, mind you.
Two steps that need to be a part of your inc. plan: Getting a tax ID number and naming your registered agent. Then later opening a bank acct for the corp. But for now just inc. I don’t think you’ll regret it.
I’m just beginning in the RE business and I’ve been advised by a local REI not to incorporate until I really have a reason. Meaning I should wait until I have a few properties under my belt and some cashflow, something to really protect. Being a sole proprietor won’t kill me initially he says. I, however thought it would be beneficial to get my business started now and go ahead and incorporate early on. Will it matter either way? I hear Delaware is the place to Inc. Any suggestions on when and how to Inc?
The main thing is not to let incorporating stand in your way of getting a deal done. You should be taking title in the name of a land trust. You can move the beneficiary interest to the corporation when you form one. It feels comfortable to sign a contract as an officer of the corp. but you should assign it at closing to that land trust.
A local REI may or may not know your financial situation and what assets you have already to protect. The best place to incorporate is where you are going to be doing business. You can do other entities in other states as you have reasons to do so.
I agree, my wife and I went to Bill Bronchick’s 2 day seminar on business structures when we first started out. His courses will give you all the information you need to file in your home state or any other state.
Due to each states law stating all foreign corps (out of state corps) must register with the state to do business in that state. You will have to file paper work with 2 states. Use MO.
It was very simply. And we only had to pay the state filing fee, no lawyers involved. Bill also goes over the paper work to maintain the corporation.
You can buy Bronchick’s book from this site. Also a good book to read is Inc.& Grow Rich by C.W. Allen