I have another question and I asure it’s not the last! :help
Is it more beneficial to obtain properties and loans as a personal account or is there a greater benefit to incorporate (etc.) and then obtain properties in a company name?
Thanks!
I am unable to obtain a loan in my company’s name right now because the company doesn’t have any credit or substantial funds built up at this time. From what I understand, when you form your company you start out with making small purchases on credit, pay them on time/early to help build up the company’s credit score. I obtained a credit card in the company’s name and am making small purchases for business related expenses in hopes that it will start to build the company’s credit before I get to the point where I’m working with enough properties that I really need to start purchasing through the company as opposed to individually. I could be wrong because I’m a newbie too so take what I say with a grain of salt.
Unless your company has been around for a couple of years and has built up strong credit most likely you will have to sign a personal guarantee anyway. You will get better rates by going with the personal loan most of the time.You can always quit claim the title to your company after closing. Hope this helps.
This is true of you are buying residential properties. Commercial (multifamily) is a completely different story. We usually create an entity to take title.
Susan,
Is the reason for creating the entitly ,ainly for asset protection? I guess meaning that since there are more families involved there are more opportunities for lawsuits?