Can somebody help with this confusing question....

[Teresa Miller]

Hello, question... When you purchase a property is it purchased as an LLC or stated another way , is each property its own LLC? Also, When you're acuring a deal, as a flip, do you acquire all under your S corp company?

I'm new at this so forgive me if I seem confused! 😁

Thanks a bunch!

[Rob Beland]

@Teresa Milleryou're missing one major consideration. Do you actually need an LLC or an S-Corp. You can in fact buy real estate, do flips, wholesale deals, etc...as a sole proprietor. You need to take an internal survey so to speak of your personal net worth. What are you looking to protect with the LLC for example? Determine the value of all of your real estate including your personal residence and then subtract the balance of all of your mortgages. Secondly, add up all of the money you have in savings/checking and in investments like a 401K, IRA, etc... Now determine the value of your large purchase items like your cars, boats, etc...and subtract the loan balances. This calculation will give you your net worth. If you are sued then your net worth is the extent of what your exposure is in the lawsuit. You should also consider a basic liability insurance policy. If your net worth is less than $500K you can get a liability policy for a few hundred dollars per year as opposed to setting up multiple corporate entities that will cost you thousands per year to establish and maintain. How much money are you making monthly/annually from your investment deals? The costs associated with LLCs and S-Corps will quickly eat away at your profits in the beginning of your investing career. Good luck Teresa. Lots of interesting advice on which entity to use but not enough consideration on whether or not you even need the entity at this stage of your investing career.