Should i start corporation or llc w/ business partner having $

[Richard Petrocelli]

Hi, I am embarking into the house flipping business in south florida. I personally am an electrician from NYC and am quite efficient in home remodeling in all almost all categories. Not that ill be doing all or most of the work, but have a good grasp on what needs to be done. My cousin is my business partner and also is the only investor. He has quite a bit of money at his disposal after a lawsuit settlement and we both decided that house flipping is accommodating to both our strengths and financial future. My question to whomever is reading is should we start and LLC or Corporation. I understand corporations are helpful in protecting the money cousin currently has. Also, if we start a corporation or LLC should we dump money into an account under the new business and then pay out to whomever necessary (contractors, agents, etc) or should my cousin pay all out of his account and than the money we get back after the flip goes into the new business account. Very new at this and any help would be much appreciated.

[Ken Martin]

The question should be answered by your tax attny. The taxation is different, and you could end up paying twice. Tell your investor to write the first check to the attny, and then seed the company account to get proper write offs. As for being a NY electrician, get ready for a shocker. You need to be a Florida licensed contractor to pull permits. You can't be owner/builder unless it's your primary residence, and if you call it that, and if you plan to flip house in less than 12 months owner/builder permits become void. For investment property, you need Contractor pulled permits. Do it, but do it right.