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Updated almost 14 years ago on . Most recent reply
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LLC now or later?
Good evening,
I am new in this great adventure of flipping homes and I need some guidance.
I am looking to start with one home at the time using a “limited†budget. I am thinking about buying an existing rehab for $20,000. Should have $9,000 of rehab cost and will ask for a selling price right around $65,000. That same home sold for $72,000 16 months ago. Somebody started some renovation but apparently run out of money…
I believe that I want to form a LLC taxed as an S corporation if I decide to keep on flipping! I also believe that a CPA will do a much better job than I at setting up my business.
The questions are would you set up a LLC corporation for your first home? If so, would you use a CPA? In addition, is his or her cost worth it? (I received a quote of $1,400 to set up the LLC with a local CPA).
In advance thank you for your advices.
Ronan
Ps: Love the site, so much great info and tips, Thank you all.
Most Popular Reply
I could be wrong (and hope that others will either agree with or correct me) but if you are planning on doing business through your LLC, like getting loans etc... banks are more likely to loan your LLC money if it's several years old with years of tax returns. So, it seems that the sooner you form your LLC the better.
Also, I don't know if it's best for a CPA to set up an LLC for you. In Texas you can just do it through the secretary of state for cheap. I think LLC's are all the same... the real protection (outside your LLC) comes from some sort of umbrella insurance... But, again others hopefully will chime in as I'm not certain