Advice on Flipping + Rentals Starting out

[Matt Bennett]

Hello,

I currently am an construction estimator for a fortune 50 company. This position gives me good understanding of estimating rehab costs on most facets of a house. My wife and I bought a house last year as a duplex but ended up turning it into a single family project that we have completely gutted, and are approximately 1 month away from selling. Before starting this adventure we saved a fair amount of money and even for the next project will mainly be funded with cash and possibly a small loan for repairs.

We are both young and starting out, and I have completely immersed myself in the real estate industry. What I have a hard time figuring out is, what my next step should be. Once this property sells, we will be looking for another "flip"(even though how long we hold it is not as important to us as this is a part time gig for me currently) and we are also looking to expand our portfolio with passive income(rental units). I would like to purchase 1 or 2 in 2019 to get started. 

I live in NYS which does not benefit me as far as taxation goes. I am curious as to what experienced investors are doing as far as purchasing, rehabbing homes and rentals by forming an LLC or as an individual and just taking the hit on capital gains(for the flips). I have heard mixed opinions on running everything through an LLC. The pros have been that it would be easier to track expenses under a business account, I would build business credit towards future lending deals. The cons have been that for taxation, I will get taxed as an LLC and then also taxed for individual income(double dipped), harder to evict tenants as you cannot represent yourself in court.

For this rehab project we have dedicated a credit card towards expenses and have nothing else on there, so as far as tracking expenses goes it seems to be doing ok for us. I have a file with categories as far as electrical, plumbing etc.

The biggest thing here is that I do mainly all of the labor myself. I do not pay out things unless I feel timing wise it is necessary(drywall finishing, roofing). To us it is sweat equity since I am not currently doing it full time. I have family members that help here and there if I need it.

My Point: I am looking to move full time to rehabbing and reselling houses once I get some passive income. What I do not want to do is come around to 2019 tax season and get killed because I did not do the right thing as far as setting up an LLC or not setting one up...Anyone out here have suggestions on how I should tread moving forward? Is it advantageous to open up a business account at all? Would you keep operating as an individual and get taxed appropriately with capital gains?