New member introduction

[Neems Y.]

Hi BP community. I'm Neems & I just joined (woohoo). I'm from the central coast of California and am working on developing a RE portfolio. I would like to accomplish this by collaborating with esteemed colleagues of the BP community. I'm currently reading the UBG (ultimate beginners guide) and have encountered a conundrum. I am interested in your thoughts on what is the best business structure (LLC, Corp, etc) for REI? I've read some articles (on BP and elsewhere), although none really provided a clear answer. Any advice will help. It's a pleasure to meet all of you.

[Trexie E.]

Hey @Neems Y.

Welcome! Glad to have you here! You can find and connect with other BP members that are in your area, here: http://www.biggerpockets.com/meet

Please don't hesitate to reach out if you have any questions or clarifications. We are always happy to help!

Good luck and I know you will have great success with this in the forums!

[Bryan Pham]

Welcome to BP!

[Dave Visaya]

Hello @Neems Y., welcome to BiggerPockets! Definitely start jumping into the community here and feel free to ask any questions related to Real Estate investing!

[Neems Y.]

Hey everyone, thank you for the pleasant welcome and links to guide me in the right direction. I hope we can all achieve our goals, connect and collaborate all while having a good time.

[Owen Schwaegerle]

Hi @Neems Y. Welcome to BP!!!

Happy to hear you are looking to create a RE portfolio. 

Great question about what business entity to use. What are your real estate goals? In my experience, one of the best entities to hold real estate assets is an LLC. While working in commercial lending, I saw several investors holding large multifamily/commercial buildings in LLCs. They do this for the tax benefit as well as the legal protection. If someone on the property wanted to sue your business, the LLC would limit the liability you have to the assets that are in the LLC. That means your house, car, other personal assets would be protected.

Lots of investors I've worked with over the years also like the LLC. But I have also seen property held as a general partnership, a sole proprietorship, and even an S and C-Corps, though most small investors choose not to use a C-Corp because of the double taxation.

Don't let creating a business entity get in the way of real estate investing. You've got to get in at some point. Just fail forward. He who fails first, succeeds first. Do It!

You may want to talk to a great attorney and CPA though to find out about the pros and cons of each entity and how they would help your business!

[Michael Guzik]

@Neems Y. Welcome to BP! Just a tip when wanting to tag someone type in the "@" button followed by the letters in their name that way they are notified when you reply because if not they will never know! My suggestion is to focus on getting a property an LLC is not important if you only have 1 or 2 properties it become important when you have a good sized portfolio that you need to protect. Good luck!

[Caleb Heimsoth]

Michael Guzik is right. If you have say less than 5 properties it’s not really worth it. (The number 5 was a suggestion of my cpa)

I created an LLC a bit prematurely (made it in June of this year). But I also realized I’d hit 5 properties pretty quickly (I should hit 5 in early 2019).

[Neems Y.]

@Caleb Heimsoth and @Michael Guzik if an LLC isn't created from the start then won't it be a extra time & money converting the owner on the pre-LLC properties title & docs?

@Owen Schwaegerle, thanks for the words of encouragement. I believe the masses go with an LLC, so I prolly go that route.

[Amy Nguyen]

Welcome and nice to meet you!

[Michael Guzik]

@Neems Y. Unless you are doing and handling all the legal docs yourself(Which is not smart) I wouldn't worry about it. That's why you hire a seasoned professionals to take care of the legal work for you.

[Neems Y.]

@Michael Guzik - That makes sense. Thank you for the insight and advice.