Many long-term investors buy several properties that have just a little cash-flow (again, about $100 or $200 per month), and then plan their retirement for when the properties are paid off -- 10, 15 or perhaps 30 years in the future, depending on how they structure and amortize their loans.If you have 10 houses generating $1000 per month in 15 years, that can replace a typical corporate salary.

And don't forget, what ever you set aside must be from the initial discreationary income, it can't be from your "sinking fund" for liabilities.As Americans go in the savings arena, we are woefully behind others.

Do you know if corporate will cover any of the deficiency?

I showed my plan to a gentleman that has been in the business for years and he said my plan is great but I should go work for a corporate investment firm and learn more before going out on my own.

The reason why I say this is because when I first started my corporation I was doing rehabs and I remember my first property was 10040 Mansfield, Detroit, Michigan 48227.

Is it an old junky house sitting on future commercial growth where you could sell to a corporation or a developer??

As to your actual question, the sooner you set up an LLC or Corporation, the better.

ToniDon't know about Texas, but if you were a foreign corp wanting to business in California you would have to register with California.So, call or write the Texas department that handles corporations, and get it directly from the horses mouth.

It is my understanding that property distributed or withdrawn from a corporation is done at fair market value and taxed as a sale.You also have related party transaction rules in play here.Best consult an experienced tax advisor before you take any steps to implement your plan.

., it goes onto your 1040), and is taxed no differently than sole proprietorship or partnership without the LLC in place.In other words, for tax purposes, an LLC is disregarded.Now, as the owner of the LLC, you do have the option to file a form (or forms) with the IRS that will allow your LLC to instead be taxed as a corporation (either s-corp or c-corp).