Transferring current properties into an entity

[Damir Kamber]

Hello BP world,

By continuing my education process, I will also continue with questions since everyone has been amazing and helpful so far. 

I currently have 2 rental properties and wanted to throw some legal questions your way. Should I transfer the properties into an entity and if so, which entity do you recommend? I will also be doing my first rehab in 2015, should that be under a different entity? 

Who is the better go-to for entity consultation, accountant or attorney?

Thanks in advance,

Damir Kamber 

[Michael Germinario]

Hi @Damir Kamber ,

I would advise that you speak to both your RE Attorney and your Accountant who can advise you what is best for your business goals and objectives. Generally, an LLC is for asset protection and this entity is probably the best vehicle to place your RE properties in. It gives you both asset protection and tax benefits, since it is taxed like a partnership. Never use a C Corp for your RE since that will create a double tax, once at the Corporation level and again at the distribution level (monies passed from the C Corp to you).

You can transfer all of your properties under one LLC or use separate LLC's for each property, but again make sure you speak with your Attorney/Accountant who can explain the pros and cons of doing so. There really isn't a one size fits all answer, and you need to set up your business to align with your current and future goals.

Happy investing,

Mike