House Flipper`s Corp[orate structure!

[snowbird]

I am creating my website(s) which has prompted me to consider the structure and target markets of my businesses.

My 2 major focuses in business are (1)flipping and (2)holding/renting.



I own a renovation corporation (Stretch Contracting Ltd.) which was opened in 2003 and has been successful ever since, but I no longer use it as I have quit working for clients to focus on flipping/holding houses. Since stopping working for clients in dec, 2010.



I have opened a website for people to learn about selling me their homes.

It's called www.thehouseflipper.ca FIRST WEBSITE--- Targets people selling their homes, shows our renovations/ flips.. also I could teach house flipping and advertise that here



I also own a Real Estate holding corporation (Priority Management Ltd.) which I use to purchase the houses that I either hold or flip. (inactive income)



I have learned from my accountant that I should try to separate the "active" income from the inactive income, because they are taxed differently.



So I thought I would have one sophisticated website where I could focus on our hold properties.. ie rental unit advertising, property for sale, info for investors, info for renters etc 2ND WEBSITE



Anyone care to comment? I know this is a very specific question, but I passed it around the last acre event and couldn't get enough feedback to send me in a clear direction.

thx, Jeff

 

[housingrental]

Hi Jeff



Not a professional opinion



My limited understanding is that you (ideally) should structure flips
and holds in two different entities so that it help provides clarity to
the CRA that your intention was to hold long term the property you sold
three years later because a good offer came in or you unexpectedly
needed the money ....and there is a distinction between that and the ten
other houses you have sold in the last three years that you bought,
renovated, and resold....



Also I support your idea of having two websites - you have two different
business, and are wanting to market in a different way to two very
different types of people you'll be transacting with - renters and
homeowners

Also might come in handy if they ever grow significantly for sale / adding partners / etc... in separate business's

 

[Thomas Beyer]

two (or websites): yes !



two or more companies: why ?

 

[snowbird]

Hi Thomas.

2 websites because I am targeting 2 different clients.

Firstly for "thehouseflipper.ca" I am targeting people that want to sell their homes because they can't afford them. The site needs to be simple and to the point and show advantages to selling to us.

Next with "Priority Mangement ltd's" website, I am targeting a more sophisticated market to promote my executive apartments for rent, high end renovated houses for sale and information for private money lenders.

To keep it as simple as possible, I figured try to keep the active income company as thehouseflipper.ca, and the inactive income in the hold co, Priority.

Also, I figured keep the sophisticated stuff away from the flip clients so it doesn't get too confusing or intimidating. Elderly people don't want to know that house flippers are going to "destroy" the home they were brought up in.. and they don't like that we are going to make a profit doing it.