All Forum Posts by: Aaron Adams

@Brandon Hall and @Bill Gulley 

Thanks guys. Yes, we will consult an attorney and accountant. If I need to throw everything out the window that I learned growing up, that's okay.  That's why my wife and I are here, to learn.  Wish I'd found the forum before we pulled the trigger.  At this point, we can either convert to something else or simply start over. Also, I didn't realize that different intents (holding, vs rehab) might need completely different models.  Thanks, we'll be reading up a lot.

@Bill Gulley 

 Bill,

That was a lot of info, I'm not sure I got all of that yet, but thank you! Our corp's intent/scope of business will eventually to hold and manage homes, becoming a broker and having our own Real Estate Agent (myself or my wife).  So no banjos here.  

So you're saying that it would be a bad idea to funnel any rental money through the company, unless we did a master lease and sub-let it.  That would be fine, considering what we're trying to do.  I'm more concerned about operating as a foreign entity in another state.  Don't know if that's possible without that aforementioned brokers license, which will be many years in the making.

One other question, why would holding rentals in a C-corp be considered a bad practice?  If the rental property was bought (owned, not transferred) by the corp, run/managed by the corp, then eventually sold, I don't see the accounting issue?  Not an accounting expert, though, welcoming your advice.

For now, we are going to use it as a property management company.  Eventually, when the corporation has it's own established credit and income, the intent is buy and sell homes in it's own name.  The corporation could eventually have employees, as well.  We don't want to transfer this particular property into the corporation, just use our corp to manage it, for now.  

Regarding S-corps.  We understand the potential tax advantages, but we don't want 50 mortgages on our credit history and our taxes.  We want a totally separate entity, of which we are owners, for multiple liability and credit reasons.  My family has owned a C-corp for our family farm for many years so I am pretty familiar with the legal/taxation issues involved with the C-corp. 

Hi Everyone,

My wife and I just incorporated and are still getting everything established for the corporation.  After much research, we went with a C-corp over an S-corp. Anyway, my wife owns a home in New Mexico (we live 9 hours away in San Antonio) and uses a property management company to handle everything.  We'd like to start getting everything run through our new corp's checking account, including rental payments coming in and the mortgage payment going out.  

In order to do this, do we need to establish some sort of contract between us, the owners of the home/mortgage and the corporation, which of course we are also the 100% owners? I then assume that with this document, we could get the property management company to redo their contract with the corp, instead of my wife personally.  

 In other words, what is the best way to transition the cash flow out of our personal accounts and into the business's? 

Also, are there implications of the corp doing business out of state?  We incorporated here in Texas, and the house/property management company is in New Mexico.

Sorry for the long explanation, but we're in a bit of a unique situation for newbies.  Welcoming any and all thoughts on the matter.

Thanks!

Aaron and Trish