All Forum Posts by: Jessica Sultani

@Linda Weygant Thanks! Once he gets his green card can we switch from being taxed as an LLC to an S Corp? Are there any other tax related issues non-citizens will face?

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Hello!
My husband and I are planning on forming a multiple member LLC consisting of just the two of us. However, he is not yet a US citizen. I'm wonder if any CPA's can confirm if we can still file as an S Corp for taxes, as he's living in the US? If it's worth it to file as an S Corp? I'd love to hear from anyone this is currently partnered with a non-citizen. I'm wondering if there are any other issues we'll face having him as a member and if we're ultimately better off forming a single member LLC and just having him work for me?

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@Mack Benson Thank you! I’m a planner, so I tend to get ahead of myself! I will plan to focus on one property at a time until I get a little more experience under my belt. I’m looking for a realistic goal to set for the first year, so I know what to expect financially. How many flips does the average flipper complete in their first year?

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@Brian Kantor Thanks for the great advice! I definitely need to take the current conditions due to Covid into consideration as well. How many properties does a flipper do on average for their first year? I want to make sure I’m setting realistic goals and expectations.

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I’m just starting out and have decided that I want my strategy to include buying both flips and rentals. Any advice on which venture I should start with? On average how many properties would a beginner purchase in their first year? How many rentals and flips do you recommend having at once? Is it possible to get financing for multiple properties at once?

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Originally posted by @Ruth Lyons:

I think it depends on how much REI you intend to do, your investment strategy, your risk tolerance and other factors.

There is at least one downside I ran into. I purchased and rehabbed a property using an LLC I set up for that property. Then that LLC had to be dissolved when I applied for a mortgage. The lender wouldn't lend money to my LLC -- granted I probably could have found a lender who would but by the time they realized the title was not in my name but in an LLC, I was halfway through the loan application process (using my personal assets and income to qualify for the loan) and I really didn't want to start over.

For asset protection, I got a $3 million personal umbrella liability insurance policy. I haven't tested this out (thankfully) but I understand that the insurance company will send their lawyers to protect the first $3 million they'd be out if a frivolous lawsuit was filed against me.

We are just looking to get started. It would be 1 house flip at a time until we build up enough cash to make a career out of it. I was hoping we could just apply for a 2nd mortgage as we both have excellent credit. I'm concerned that as a newly formed LLC we wouldn't get approved for the money we need as we wouldn't have any established credit?

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Originally posted by @Brian Geiger:

@Jessica Sultani,

I think everyone who commented on this gave really good points. If you are going to get a loan from a Hard Money Lender, they will require that you set up an LLC. In addition, you want the LLC set up for asset protection purposes. If someone gets hurt on your property, they can go after your personal assets because you do not have a corporate veil protecting you from investment assets. Insurance will only cover so much and then you will have to find a way to cover what is not covered by insurance.

Lastly, depending on the amount of properties you invest in, you may have to create multiple LLCs because you want to separate most of your properties. As it relates to my first point, if someone get hurt on one of your properties and insurance doesn't cover 100% of the claim, you will need to pick the remaining tab and that leaves the door open to go after everything that is own within that one LLC. So I would create multiple LLCs if I am doing multiple properties.

Thank you! I guess this leads me into my next question... how do I build credit for each LLC so quickly in order to even get approved for loans? Or do I have 1 main LLC for my company and multiple LLCs underneath to represent each property?

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Originally posted by @Joe Homs:

@Jessica Sultani only if you want to protect your assets. Honestly, YES!

Good investing...

I guess that’s where my confusion lies. Protection from what? Lawsuits? Foreclosure on the house we purchase to flip?

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My husband and I want to start flipping houses. Do we need to form an LLC and operate as a business or can we just buy/fix/sell under our own names?

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All Forum Posts by: Jessica Sultani

Jessica Sultani has started 3 posts and replied 9 times.

Post: MMLLC, non-US citizen, and taxes

Post: MMLLC, non-US citizen, and taxes

Post: Flips & Rental properties

Post: Flips & Rental properties

Post: Flips & Rental properties

Post: Is forming an LLC necessary

Post: Is forming an LLC necessary

Post: Is forming an LLC necessary

Post: Is forming an LLC necessary