All Forum Posts by: Dezso Kovi

Formation of an LLC for a focused business venture is ideal. We just created an LLC for our development deal 120 lots, after they buyer completely purchases all lots we are closing it and then make a new LLC for the next project. When you start accumulating a lot " a lot" being relative to you, then look into the other options of trust, but for real estate investing I have not had a client in 11 years see the need for anything else.

Now the LLC can own another, many of my builders do this, One company is the Parent name we all know and recognize, the other is the company that takes on the burden of labor, work hazard risks and warranty.

FYI I have only owned 1 vehicle in my name in past 10 years all of my vehicles, and other expenses I find a purposeful business usage to lower my taxable income. This is why the LLC exists. But please go ask, learn more always.

@Dezso Kovi from an Lender point of view and former business owner. The LLC is easier to lend and establish. So your business will be started with no existing cash flow so LLC is a great option. It does not matter how many members of the LLC you have, until the business makes $ they personal guarantors will be liable. Meaning for a new LLC the FICO scores of your members matter and their cash reserves. I know some large clients whom still operate under an LLC. When you consider you have double taxation on a Corp, why would you do it if you do now have outside investor capital ( stock holders)?

Also with an LLC we can lend to the LLC as long as 1 member with over 30% ownership has a 700+ credit score. Hope this helps......LLC for the WIN!

Dezo, 

Stephen is correct.  It sounds like you have several moving parts here.  Better to consult an attorney, spend a few dollars and sort this out.

Regarding getting a loan, it's easier to get one in our own name first.  If you are working with a lender on commercial paper and want the business name on it, there is little difference between the corporate forms.  Corporations issue stock and have a different agreement that conforms to state regulations.  If all of that is done, you should have a little problem with an experienced lender.