I just formed my LLC, now I am looking for people with good credit or funds. MY main concern is losing control of my company.
If I bring someone in, with good credit, and the property is purchased in the both of our names or just that person who’s credit is better than mine, is there a way to get that mortgage out of the person’s name and back into my company’s name?
I pose the same question if I purchase in my personal name, can I quit claim the property into the biz name, and get the mortgage off of my credit report?
I don’t want to take people on as permanent parntner’s, but pay them to use their credit or funds, buy the property in their name or the both of ours, and eventually get the property out of their name and into my company’s name.
Also, I had a lender tell me I cannot purchase property in my company’s name, is that true? He said it has to be in my personal name.
I say, from experience, that the best answer you’ll get will be from sitting down with either a CPA or a bookkeeper with real estate clients and pound them for an hour with your questions. This is what I did when I got my LLC.
Some of the answers will depend on how much $$ you make from your ‘day-job’, how many dependants you have, etc. In general, if you know you’ll be tracking lots of expenses through the company, then you want to have the majority of your $$ in the LLC (bleeding it out for personal expenses as you need it.) Meanwhile you’ll want a separate Tax Reserve checking account as well.
If your ‘day job’ income is through an employer, that changes things since they already tax your money before you get your net check. How many kids you have also affects that amount.
But no matter how you decide to handle your partners, you’ll want to have a CPA/bookkeeper handle your finances every quarter so there are no surprises either at tax time or if/when one of the partners decides to cash-out of the LLC.
One last thing to keep in mind is the amount of $$ being made. There are different thoughts on whether to go with an LLC or Incorporation, S or C… and all that requires a live dialoge with your bookkeeper. So don’t skimp on this expense or it will really bite you in the end.