Do I need an LLC when starting up a small real estate business as a second source of income

[Ross Benedict]

hi guys, quick question for anyone that can help me out. I'm currently beginning to dabble with the idea of buying and selling vacant land. As I already work this will start as more or less a hobby as I learn the ropes until I get to the point that I can make it a lucrative second source of income. For the time being should I be concerned with starting some sort of LLC. Obviously not at the point where this is any type of business yet but I want to be sure that my personal assets are protected. (I should add the current plots i Will be dealing with are only around 3-5k as I get started. Thanks for any info anyone has!

[Victor Noriega]

My wife and I are also land investors. We created an LLC this past December after getting our first flip under contract. I think we could have held off a bit longer, but creating the LLC made this "Hobby" an official business and is treated as a business. Since it is my wife and I that are the owners/members of the business, the IRS sees us as a disregard LLC. Please meet with an accountant to understand how your profits will be taxed and how to properly file your taxes. On another note, We also started with $3k-$5k lots, and quickly realized that they had limited, if any, profit. Fixed costs such as closing costs can quickly eat up your profit.