Legal Structures

[Aaron Fox]

What is the best legal structure to use for a business that rehabs and flips residential properties?

[Rajeev Kotyan]

@Aaron Fox: First put an overall business plan together, including what to do when things fail, and when things are hunky-dory (my technical jargon !!!). What would you like the business' to do including but not limited to hiring and firing of people, contractors, business, how you find your rehabs and the process until sales. While you may not know all the answers, it will help both yourself and your professional team (CPA's, financial planners and attorneys) to help you decide what is best for you to start with and if and when required to convert or add additional entities.

There is no magic bullet, just your plan and your process. There are choices to be made, based on some laws, but having a business plan allows one make a decision that fits best for your circumstances.

I have a combination of LLC's, S-Corp and Trusts (for my personal investment structures), and now in the process of merging some LLC's with S-Corporation features. Change is inevitable except from a vending machine!!!.