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Updated almost 7 years ago on . Most recent reply

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291
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Tristan S.
  • Rental Property Investor
  • Boone, NC
88
Votes |
291
Posts

What is the right structure for someone starting to make deals?

Tristan S.
  • Rental Property Investor
  • Boone, NC
Posted

Hello,

I am a beginner investor, recently closed on my first wholesale deal. Now that I am starting to generate income from real estate, I want to know what would be the best way to structure my business. I am located in Houston, Texas and my goal is primarily to acquire rentals while wholesaling some deals along the way.

I do not have any LLC or anything set up yet. What basic investment structure would you recommend from your personal experience?
I was thinking about two LLC's, one for acquisition (the rentals would be under that LLC name, and I would also use that LLC to do my wholesale deals) and a second LLC that would act as the property management company for the rentals (hold the rent money, pay expenses..etc).

Please let me know what are you thoughts.

Thanks

Most Popular Reply

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4,609
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David Dachtera
  • Rental Property Investor
  • Rockford, IL
2,990
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4,609
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David Dachtera
  • Rental Property Investor
  • Rockford, IL
Replied

@Tristan S.,

Ask your CPA about this structure...

Set up a trust with you as the beneficiary.

Set up an S-Corp to be your operating company. Most of the cash will flow through the S-Corp. The trust owns the S-Corp.

Set up an LLC to hold your first couple or few properties. The S-Corp and the trust own the LLC.

This way, you "control everything, own nothing".

If (s)he chokes on it, I can refer you to someone who can handle it (JD/CPA Tax Attorney / Accountant).

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