s corp or llc?

[Steve Blair]

I was wondering what was recommended as the preferred company set up for a rehabber. I do not have any partners, plan to rehab primarily and am located in Orlando, Florida (no state tax). I've asked an attorney and my cpa and a couple local flippers. It seems the LLC is common but can be more expensive once you get several houses under your umbrella as the insurance becomes more expensive once you need more than 1 million in coverage. The s corp has the same tax advantages, but more paperwork for employee tax deductions. I can also add partners (not planned at this point) more easily with it. I know one person who uses an s corp that owns several other LLC's as needed to cover houses as they come aboard.

Thanks all! Steve

[Jared Townsend]

Speaking from an insurance perspective I often see investors split the properties into multiple LLCs. Typically they have 1-7 properties per LLC. We write $1 million per occurrence and $2 million aggregate per LLC and the cost is usually around $200/year per property and an additional $200/year for each pool.

I would certainly consult with a good attorney and CPA to get their take as well.