Closing in LLC Question

[Account Closed]

Background: I have some buy and hold properties but I am doing my first wholesale. I have an LLC in another state where I do business, but want to keep that separate from my wholesaling.

My question is whose name should I wholesale in?

I have no LLC for wholesaling. I am putting this property under contract today/tomorrow. I plan to form an LLC specifically for wholesaling this year. Should I close in "My Name" dba "LLC" or should I just close in my name since I have no LLC set up yet?

2nd question: If I close in my name, can I still get the LLC tax benefits if I set it up this year?

3rd question: I live in California but my wholesale deal is in another state. Where should I form the LLC? California LLC filing takes 1-2 months unless you pay $500 rush fee. Other states only takes a day or two (I filed an Indiana LLC the same day)

Final question: How does an S-Corp come into play?

[Shawn Holsapple]

@Steve Babiak makes some good points.

It sounds like forming a LLC outside of CA is much more economical. Here in Indiana, the annual fee is around $125 vs. CA is over $800 [I believe].

I based my setup on the Rich Dad Education books [The ABC's of RE Investing & RE Advantages]. I have a S-Corp as the "parent" company, then a LLC for flipping/wholesaling and then several more LLC's for the buy/hold properties.

As mentioned above, a good CPA should be able to help you set this up. If they haven't heard of this setup or tell you to just be a sole proprietor - run out of their office!

A good gauge I used for selecting my CPA is to ask them how many audits they have been a part of. If the answer is a proud "None" or very few, then they are too passive and not aggressive enough. Move on to the next one. You want a seasoned investment freindly CPA, preferrably a land lord or investor as well.

Remember - It's not what you make but what you KEEP!