Can't seem to figure best way to set up business

Hey All,

This is one area I struggle in. I think I’m great at finding a deals, researching the properties, working the numbers but I can’t seem to grasp what type of entity to set up and why?

I’m looking into purchasing an apartment bldg in the next couple months. Should I work on setting up an LLC or C-corp now? Or wait until I purchase the property? If I wait, would I just tranfer the property into the business name?

Here are a couple more questions:

  1. If the business is not set up can I still write expenses off?
  2. I set up the business in the state the property is located, correct?
  3. Income tax - if you live outside of the state you purchase - Is there double tax or anything I should be aware of?

I’m really considering investing in Texas, but just read about the franchise tax. What is the best entity to set up for Texas properties?



The best entity for buying real estate in Texas is a limited partnership, because it can be set up so that zero franchise taxes are owed (a loophole the Secretary of State has yet to close).

However, if it’s a new business or one that will not generate that much income for awhile, an LLC is probably fine (you don’t owe any franchise taxes until you collect $150,000 of receipts in a year).

I can help you set things up if you like.

Best, Drew


I would encourage you to read back thru the old post in the forum; this has been discussed extensively in the past with a lot of excellent information from many contributors.

It is a very valid question