Newby at rehabbing and flipping - have a few questions

[Katrina P.]

Hi All,

Hubby and I will likely buy a few tax foreclosures next month. Depending on the possibilities for each house, we will decide at that moment whether we will fix and flip or buy and hold. Anyways, we're brand new to this, so I have a few questions:

1. Should I form an LLC now?
2. Initially, we will begin investing in another state, so if we form an LLC, does it have to be in the state we plan on investing in, or can we form it in the state we live in? I'm pretty sure we can form it here, but just thought I'd ask.
3. Also, if I currently have an LLC setup, can I just change the name on that one and use it, instead of opening a new one?
4. Can we use our accountant here or should I find one in the state we plan on investing in?

Also, would anyone mind sharing some of their experiences with buying tax foreclosed homes? What's the average price you pay, and the average cost of repairs? When flipping, what's the average profit you make? I'm just curious :-)

Thanks!

Katrina

[Steve A.]

My 2 cents:

You are only asking for trouble if your first flipping experience is out of state tax auctions. LLC formation would be the least of my worries.

Tax foreclosures can be very complex. Get a great real estate attorney to work with you for tax sales AFTER you do some local REO flips (again this is just my 2 cents).