set up an LLC as real estate investment business?

[Barbara Chan]

I've been talking to a company that says you can set up your LLC as an actively managing real estate investment business getting its own financing, building it's own credit history, having the tax deductions of a home business while holding buy and hold rentals. They even help you get 0% interest for the first 12-18 months funding to start building credit history in the LLC. Has anyone had experience with this?

[David Chwaszczewski]

@Barbara Chan Beware of companies like this. Some are legit, however most are not. You can setup an LLC with an attorney and then start to build credit yourself. For new businesses you will have to personally guaranty the loan. Start small with accounts that report to Dun & Bradstreet. You can do staples, office max, Walmart, apple etc.. Trick is you want 4-5 companies that report to them to establish credit. Also length of time the company has been in business plays a lot on lenders decision.

You don't want to mix your operating company with your holding company.  If your operating company defaults on a loan you don't want it tied to property held by your llc.  

Here is how I setup our llc's:

Operating LLC: Has business credit - all of our day to day goes through this LLC

Holding LLC: This only hold the property. No business is to be done out of this account.

Flip LLC: This only holds the property while we own it. No business to be done out of this account.

You can hold multiple bank accounts in your LLC's so you don't mix funds. Hopefully this will help get you started.