Confused about different businesses

My wife and I want to get started investing in real estate,
but I’m not sure the best way to go about it. We live in California,
but would like to purchase property in another state.

As I understand it, if we form an LLC, we have to pay to set up the LLC as well as
pay $800 minimum tax to California every year. I believe you also have to get a business
license and pay for permits to run your business in the city where your business is located.

It seems like a lot of my potential profit will go towards paying taxes to run a small business
instead of in my pocket. This doesn’t seem like a good investment.

The other option is to form a general partnership with my wife instead of an LLC. I would still
have to get licenses and permits to run the business, as well as file a fictitious business name,
but I would skip out on the $800 minimum tax that the LLC would force me to pay. However, I would have to purchase Liability insurance to help protect against lawsuits, etc.

Seems cheaper than an LLC, but still takes a lot of money out of my pocket.

I guess my question is, do we have to set up a business to own rental properties?
Couldn’t we just purchase a property and a limited liability insurance policy and skip out on all the business taxes?

the last question you ask is probably the best one to start with…

you don’t nec essarily have to set up a busines to start owning rental properties…worry about that later after you have accumulated some properties or deals…

you seem to be focusing mostly on business, licenses, and permit fees…maybe try first to decide, “what sort of real estate ventures am I most interested in?”

what are my exit strategies for the properties?..what is my total amount of funds I have to start with without overstretching myself, or w/out putting my whole livelyhood in jeopardy if things don’t go as planned?

here is my recommendation…you can agree with or not…get yourself a professional mentor (not a guru coach who wants to charge you $10,000)…and do what they tell you to…you also should understand that to amass the riches you are seeking in REI…you need to be prepared to go way out of your comfort zone…not a bad thing, but something new to you…

there is a great, successful professional mentor, who would be willing to mentor you if you are interested…and he lives in CA…(a big plus for you)

the best way to learn how to do something successfully is…is learn from others who have done successfully that which you are desiring to learn.

2 more items to think about…1.- a good mentor will help you to make as much money in 1 year as it would take you 10 years to make on your own…2.- the goal here in REI is to make money…

if you haven’t done REI before…not only will you most likely not maximize your profits on your own…but when you make the decision not to seek professional help…you risk possibloy going into the red and losing money…not cool right?

anywho…I wish you the best

(if you want to speak with this individual from this site…who has 30+ years experience…send me a PM, and I’ll forward you his contact info…you will be more than pleased with the results if you decide to work with him

Good Luck