So the big question? Im starting a company and whats the best way to set it up? There is two of us but not necessarily equal partners. The focus of the business is to do flips and then at some point acquire buy and holds. Still continuing in the flips. Along the way we will be using investment money from different sources including private financing and JVs. How should it be set up. Ive been told rentals are best not held within a corporation. Can there be one primary company with branches of it to take advantage of the tax benefits. There will be trades whether they'll be employees or contractors. Hopefully have a crew full time that i keep busy between flips and renovations. Should that be a branch too? a renovation company or is this getting to complex. Could real use some insite. Either by responses on here or if anyone wants to set up a meeting to talk in person or on the phone would be great. BTW I'm a former REIN member now ready to pull the trigger in a big way. Once things get rolling plan on joining again. thank you for any input.
incorporate or not?
- Thread starter renoman
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- Aug 30, 2007
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Corporations cost money to administer annually, say $2-3000 each. So for 3 firms that is 8-10,000, not chump change.
Do not mix buy-and-hold with capital gains taxes on exit with flips where a sale is treated as business income. Separate them into two firms.
A JV always has to be separate, perhaps with a firm being one of the JV partners.
A renovation firm could be the same as flip firm as all is taxed as business income, so no need to separate until very large.
Related post: http://myreinspace.com/f/public_forums/Real_Estate_Discussion/62-20471-147389-To_incorporate__or_not_.html
Do not mix buy-and-hold with capital gains taxes on exit with flips where a sale is treated as business income. Separate them into two firms.
A JV always has to be separate, perhaps with a firm being one of the JV partners.
A renovation firm could be the same as flip firm as all is taxed as business income, so no need to separate until very large.
Related post: http://myreinspace.com/f/public_forums/Real_Estate_Discussion/62-20471-147389-To_incorporate__or_not_.html