Type of Real Estate Business/Entity

I have started to get in to real estate investing. What sort of business structure should I set up to do so, to best protect myself and my assets and deal with taxes? A corporation?
Also, I have been told to do an LLC to invest in the states. Do you know anything about these?

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Jul 13, 2015
RE: Type of Real Estate Business/Entity
by: Tom

Thanks for the question!!

We're not accountants but we typically suggest you "lead with revenue". What we mean by that is this... it's likely fine to invest using your personal name as long as you have proper insurance. There are property types that may immediately warrant a corp. structure like a large building or student rentals, however, for most properties having the proper insurance is likely enough protection. It costs a fair amount to incorporate and setup/run and file taxes for businesses so we'd suggest waiting until your portfolio produces enough free cash flow to cover the overhead of using corporation. Again, speak to both an accountant and your lawyer for proper advice on this topic! We don't do anything in the U.S. right now so we can't comment on the LLC.

Hope that helps a tad,

Tom

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