Looking for financial advice in the NW Arkansas area. LLC / Tax?

Question

hi everyone!

I'm looking to start investing into Multifamily/AirBnB together with my fiancé but we would like to hear from your experience what is the best way to get started in regards to creating LLC and taxes implications. We might also need some help on how to manage real estate investments with family in parallel to our own gig.

I would love to connect and brainstorm on the best ways to go forward!Edgar

Ryan Blackstone · Answer

@Michael Comello there are two groups in NWA that I know of to network. One is just a meetup that will meet this coming Wednesday (2nd Wednesday of the month) at  Southern Food Company in Fayetteville. @Kathleen Everitt runs the other meetup that is more educational and they meet once a week.

Tom S. · Answer

@Edgar Duarte  As everyone mentions, speak to a CPA.  One thing to note, for tax purposes on a long term rental (you mentioned multi-family buildings), the LLC is discarded for federal taxes and all income and expenses just go on Sch E on your tax return.

Can't comment on short term rentals, but on the long term side, I've been in the landlord business for 20 years.

Good luck!

Edgar Duarte · Answer

thank you very much for all your comments, I was curious about the LLC as it maybe an easier way to separate the family business part from my own, since the capital source, expenses and earnings will be separate I'm trying to keep it as clean as possible while leveraging when possible. everyone's comments are aligned and I will talk to a CPA, by the way! last year I did my taxes with a random HR Block person as I was doing no fun! but now is different, as I form my team it would be pretty cool if you can share some CPA contacts in the NWA area familiar with Real Estate investing!.Again thanks for all your help!

Edgar

Will Fraser · Answer

Hi @Edgar Duarte, welcome to the BiggerPockets forums!  You're on a good path here and I want to encourage you to keep going!

As far as how to form an LLC and the rest of the questions you've asked here I would highly recommend getting some face time with a local real estate investor who has walked this path ahead of you and can speak from their experience, as this will be a good opportunity to "begin with the end in mind."

If you don't know of anyone that fits that bill in NWA and you find yourself in Oklahoma City, It would be an honor to get together!

Jennifer Schelkopf · Answer

Hi @Edgar Duarte - I live and invest in Northwest Arkansas. I formed an LLC with my spouse just a few weeks ago. Before doing so, I asked our CPA a few questions about tax implications and it was really helpful. I definitely recommend that route! For us, the LLC will introduce a new form to our taxes, but we don’t expect much else in terms of impact. Your situation may be different and that’s why I’d recommend asking your CPA.

I’m happy to share my experience with forming an LLC, along with recommendations for a local CPA and attorney, if you’re interested. Feel free to DM me!

Logan Ingram · Answer

Morning @Edgar Duarte! I live in Searcy, so not far from NW AR. I have some properties here in Arkansas and have had some in Texas. I am also a licensed agent here in both AR and TX. I had a cabin on the Little Red River near Greers Ferry Lake that I went in with family on. We AirBnB'd it for 2 years and sold it (unwillingly I might add). We did not have an LLC for that property and it was a bit complicated with the family aspect with taxes and income. I have decided to run with an LLC for my investments from now on based on how I want to move money and track things.

I would definitely consult your CPA about which route you should go. There are a lot of factors like personal choices and goals that would play a role in which entity you might want to go with. I'd be happy to help any way I can, feel free to PM me and we can connect.

Ryan Blackstone · Answer

@Edgar Duarte An LLC is the way we went. It also helps opening separate bank accounts and credit cards for them. We primarily use apartments.com to run the rentals. We use a quarterly maintenance company to manage the physical aspect of our properties. @Dustin Davis and Jeff Ahern run that company. A rule of thumb my CPA told us, that if you are making over 100k then you need to form one. If its less than 100k then it is personal preference and your own risk tolerance. It is always good to talk to your CPA and your Attorney.

Ryan Blackstone · Answer

No we don't. However, @Kathleen Everitt is doing virtual at the local REI Meetup.

Edgar Duarte · Answer

hey @Ryan Blackstonedo you know if they ever have virtual meet ups, I can't make it in person right now but I would love to start connecting

Michael Comello · Answer

Hi there @Edgar Duarte and @Jennifer Schelkopf,

Apologies, I do not have insight into the LLC/attorney topic.

I am new to the real investing world and have been looking to get into the multi-family & AirBnB sectors in the Fayetteville area.

I have also been looking in the Fort Smith/Van Buren area as well for smaller multi-family.

I do not have any experience at this point but have been analyzing potential deals almost daily. I would love to connect and network to share any expertise we may be able to share with each other!

Looking for financial advice in the NW Arkansas area. LLC / Tax?

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