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TOPIC: Entity
#5052
Joy ()
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Entity 4 Years, 10 Months ago Karma: 0  
Has anyone set up an entity for their real estate investing business? I was thinking of setting up a LLC so I can protect my assets. What are all your thoughts?

Thanks,
J
 
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#5053
JenniferMc ()
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Re: Entity 4 Years, 10 Months ago Karma: 0  
Hello! Welcome!

Yes - we set up an LLC. There are several posts on that topic in the forum....here's one to help you get started!

http://www.homeforum.com/index.php?option=com_smf&Itemid=99999999&topic=1227.0

You can do a search and pull up the topics that have "LLC" in them
 
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#5054
Amber ()
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Re: Entity 4 Years, 10 Months ago Karma: 0  
jliempeck, you really should be consulting with a CPA or a tax attorney if you are concerned with the setup of a business entity.  They can tell you the ins and outs _base_d on how you want cash handled, and expenses to be paid, partnerships to be handled, etc.  However, I think an LLC is likely the best entity for real estate because there is no additional tax on liquidation of property contributed to the business when you want to quit.  Unfortunately, LLCs are taxed differently in every state.  No matter which entity you pick - please remember to make estimated tax payments rather then wait until the april tax deadline.  That can be scarry!
 
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#5055
frankndawn ()
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Re: Entity 4 Years, 8 Months ago Karma: -1  
We structured as a C-Corporation. We have found that the corporate structure had a TON more tax savings advantages than a partnership or LLC, and like a LLC is considered a separate entity...

Talk to your accountant to get their thoughts on the entity type.

Good Luck
 
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#5056
joy ()
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Re: Entity 4 Years, 7 Months ago Karma: 0  
Asset Protection.

When using an LLC to hold real estate, it is very important that you also obtain comprehensive property insurance coverage. In the event of a lawsuit brought against the LLC by a tenant injured on the premises, or, believe it or not, even by a trespasser on your land, good and comprehensive insurance can save you money in the long run. It may even save the property itself if a claimant was to successfully sue the LLC and win. If the LLC had no insurance coverage in place a court may order the property sold to pay the claimant's judgment. However, if a lawsuit is brought against you personally, and a claimant attempts to seize assets you hold through an LLC, the rules are a little different.
 
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#5057
Renee ()
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Re: Entity 4 Years, 7 Months ago Karma: 0  
On the topic of LLC, check and see if your state recognizes Series LLC's. Mine (IL) does, as does Delaware and a few others.

A Series LLC allows you to hold property in an LLC, but each property is _title_d in a different "cell" (or series). The theory is that if someone gets hurt, a lawsuit can come after the property in that "cell" only, not the assets of the entire LLC.

Here is a _link_ that explains it much better than I ever could:

http://www.assetprotectionbook.com/series_llc.htm

As always, check with legal counsel for specifics in your state, and for your situation. What's right for one might not be right for everyone!
 
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