Where to Create your Real Estate LLC

Where to Create your Real Estate LLC

So You Want to Start a Business. Where Do You Begin? This isn’t a figurative question: one of the main things we get asked about is where—geographically speaking—an investor, who’s buying and selling real estate, should set up a business entity. What makes this question tricky is that there’s no single correct answer: the right … Continue reading Where to Create your Real Estate LLC

Where to Create your Real Estate LLC

Where to Create your Real Estate LLC

So You Want to Start a Business. Where Do You Begin? This isn’t a figurative question: one of the main things we get asked about is where—geographically speaking—an investor, who’s buying and selling real estate, should set up a business entity. What makes this question tricky is that there’s no single correct answer: the right solution will be different for a “flipper” than it will be for an investor forming an LLC, and different for a single-state investor than for one with properties all over the place. This post will talk about how various factors will impact your business location. Where Do You Plan to Invest? How far afield do you plan to spread your investment dollars?  Let’s say you live in Washington state, but you’re going to be investing in Oregon. Right out of the gate, I’m going to recommend that you create your business in Oregon, because that’s where the activity is taking place. If you don’t do any of that in Washington but you file your business registration papers there, you’ll have to turn around and re-register that corporation in Oregon as a “foreign” corporation. Foreign corporations also come into play with investors who say things like,

Onsite Property Management: the Good, the Bad, and the Ugly

Onsite Property Management: the Good, the Bad, and the Ugly

If you’re the owner of a multi-unit complex of any kind, typically, you also have an onsite property manager. Also typically, employing this person includes offering him/her lodging plus a base salary. The amount you pay your manager, of course, depends on the number of units for which he or she is responsible, the amount of work involved, and the nature of that work. The amount of “free rent” you offer is generally not a tax problem, either—IF you meet certain conditions: You must furnish the lodging on its business premises. In other words, where your manager lives must be a part of the property being managed. You must have a valid business reason for providing the housing. This usually means that you need a manager on site to respond to tenants and protect the property. AND… Your manager MUST accept lodgings as a condition of employment. All three of these conditions must be present in order to avoid tax liability. If even one of them isn’t, then you’ll need to include the net value of the lodging on your manager’s W-2 form, and the manager is required to report that income on his or her tax return. So far,

Onsite Property Management: the Good, the Bad, and the Ugly

Onsite Property Management: the Good, the Bad, and the Ugly

If you’re the owner of a multi-unit complex of any kind, typically, you also have an onsite property manager. Also typically, employing this person includes offering him/her lodging plus a base salary. The amount you pay your manager, of course, depends on the number of units for which he or she is responsible, the amount … Continue reading Onsite Property Management: the Good, the Bad, and the Ugly