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    2 Replies Latest reply on Dec 21, 2012 9:28 AM by Moderator Melinda

    LLC or INC for new rental property managment

    Sandusky2011 Newbie

      I have been working with an investor for several years now.  He purchases foreclosure properties, renovates, then rents or sells based on the market.  He has approached me about purchasing a block of his properties and I do plan to move forward with purchase.  My question is, should I start and LLC or an INC?  I have had a partnership in the past that ended badly and at great expense.  I want to protect myself and my personal property, I would be the only investor in the company at least for the first few years.  Any Suggestions? 

      Thank You!!

        • Re: LLC or INC for new rental property managment
          Uncle Leon Tracker

          I am neither an accountant, nor a Lawyer....and I don't play either one on TV. 

           

          Do yourself a favor....Talk with these two professionals beffore deciding.  A couple hundred dollars now, may be far more precious, later.

          • Re: LLC or INC for new rental property managment
            77hornytoad Adventurer

            Sandusky2011,

            I agree with Uncle Leon about asking a professional even if it costs a consultation fee it can be worth it in the long run.  I started an LLC early this year and have been learning about the rental real estate business and such.  I know every state is different but in Arizona at least if your income is passive primarily just rental income then you go with the llc.  If you are actively managing or doing all of the renovating then you go as an S-Type corporation.  I bought a lot of books on the subject and I have found that many of them were written pre market crash so the information is not as up to date so its definitely good to get a second opinion just go in with some notes and questions in advance so you are not wasting your time and money.

            • Re: LLC or INC for new rental property managment
              Guide

              Hi Sandusky,

               

              Echoing Uncle Leon and