New Real Estate Business - Seeking Advice

[Derek C.]

Hello, I am looking for some advice on setting up an LLC. Myself and two friends are looking to start flipping homes and eventually get into buy/hold/rental properties. We need some guidance on setting up an LLC and understanding some tax laws. Did you setup your LLC with a website? Did you use an attorney? Do you handle taxes yourself or with an accountant? Any and all suggestions would be appreciated.

[Lydia R.]

@Derek C. if you are starting a business with anyone that you are not married to I would strongly suggest forming an LLC. Have an attorney draft your articles of incorporation and operating agreement. Make sure it includes everything about how your business will run, what each persons responsibilities are, who will contribute what, how profits will be divided etc. This is so crucial for starting a business with multiple people involved. Everything sounds great in the beginning because there is no money in the business yet. Real estate investing is definitely a lot of hard (but rewarding work) and if there is one person doing more of the work than someone else, human nature kicks in and that person will naturally want or feel entitled to a larger slice of the profits. Starting out with a clear understanding of each persons roles and responsibilities will save you a lot of headache late on down the line. Also include buyout clauses. If someone wants out you need a written process for how that will happen. If 2 members want to get rid of another you need something that states how that will go. You cant plan for every possible scenario but you can cover some of the ones that are most likely to occur.

Absolutely get a website and a some social media (business page on FB and LinkedIn) because its inexpensive and you want people to be able to easily find you online when they look for you