LLC and the Basics for Part-Time Rehabbing

[Brandon Bartoldi]

I am going to be a 50/50 partner with my family member as we begin to rehab and flip houses. We work full time so we plan on only flipping 2-4 homes per year. At first we thought to start an LLC after our first flip, but after looking into tax preparation and personal liability, it seems to make more sense to set up the LLC before the first flip. Would you agree?

If yes, I am trying to figure out the logistics of how this will come together. How would it work since we planned on taking out a conventional mortgage loan since we both have great credit and solid full-time income?

[Brian Turnbough]

Have you done a flip together in the past? I would suggest doing your first flip together without the LLC. That way if you don't like each other's ideas or like working on it together your not out the cost of starting the entity. When the house sells you can part ways. If it goes great and you have fun working together then get the LLC and start writing expenses off of your taxes.