When to start an LLC?

[Ryan Cleary]

Now that I am starting to gather momentum in investing as well as my professional career, I feel as though I am getting close to the point where I am going to have to start thinking about a LLC or something similar. We file our taxes in New York.

Here is my scenario:

-I have a w2 job which as of right now is my main source of income. (NY)

-I am a new real estate agent with a few deals working. (NY)

-My future wife has a w2 job and will be an agent within the next few weeks. (NY)

-We are one year into a live-in flip (NY)

-We have a long distance buy and hold duplex in Florida (FL)

-We are in contract for a buy and hold duplex in Ohio (OH)

-We plan to build a portfolio of small multi-family in OH within the next year and refi all OH to a blanket. (OH)

My future wife and I own everything 50-50, what are your suggestions?

[Suzanne Player]

You are at the point where you definitely need a corporate attorney to advise you on how to structure things going forward. With a property in contract, I would suggest you make this a priority. I don’t know if you are using an attorney in Ohio for your purchase, and if so, whether that attorney also does corporate work, but regardless, you need to have at least 1 attorney on your team. 

You should have landlord tenant counsel review and approve all your leases for your tenants (even if you have a form lease you believe is safe to use). 

You also should have a CPA working with you for tax planning and other considerations. 

While there are costs to hiring these professionals, there are bigger costs to not hiring them. It looks like you are making great progress at accumulating a portfolio at a very young age, don’t set yourself up for problems by moving ahead without counsel (especially if you pay taxes or do any business like a flip in New York).