Looking to get into Real Estate and have a few specific questions

General Real Estate Investing
1

I am a real estate purchasing newbie and I am looking to get all my ducks in a row before I make the plunge. Here is what I am trying to do… I am trying to create an LLC to own a property that has multiple owners. This is not a big deal, but it looks like not having “active” business partners (in this case investors) the tax benefits of an LLC and real estate shrink. How are other structuring deals with investors money involved to maximize the benefits?

Secondly, I would like to create a company that is responsible for researching, finding and creating the real estate deals for investors. I can again create an LLC, but how do people then collect revenue to offset the expenses to find the deals? Do you create finders fees or perhaps the LLC becomes the property manager?

Any thoughts would be greatly appreciated.

Thanks in advance!

Jeremy B

2

there are no tax benefits to an LLC. LLC is a liability protection device, not a tax strategy. (despite what you hear on the legalzooom commercials)

there could be some tax advantage to an S-corp or an LLC taxed as an S-corp IF the entity will spin off enough free cashflow to pay a reasonable salary with extra cash left over.

3

as far as your second question, I do something similiar with some investors, normally I get half of the deal for putting it togerher, managing the rehab and managing the property, but in some cases I charge a finders fee for finding the property, a fee for acting basically as a GC for the rehab (that fee will vary greatly depending on what is involved in the rehab), and a fee for managing the property.

I don’t use an LLC for that, I just use my personal name, no reason to make it more complex than it needs to be

andy

4

Whether you have money or not you can start right away. If you have money you can start an LLC or Corp and I recommend a Real Estate IRA to do deals consult a good legal advice from a referral from an investors. If you don’t have money I suggest wholesaling for quick cash reserves and letting the business dictate if you get a LLC or Corp because you might find you don’t want or need it.