Buying apartment rental property?
Me and a partner are thinking of buying apartment rental property. What would be the best way of doing this? Starting a business partnership? Doing it as just individuals? I have also heard of doing it as a corporation? What is the advantages and disadvantages of each? I personally feel going thru a business would be best because of tax breaks and such. But I am unsure of what starting a corporation entails. Any other tips would be greatly appreciated. Thanks
- dzwreckLv 41 decade agoFavorite Answer
If you have never bought commercial property or apartments before then you may have a hard time finding a lender willing to finance you as a corporation or as a business partnership at first. You might be best off if you buy the apartment as just individuals and then you can always move the property into the name of a corporation later on. The mortgage on the property will still be in your name but you can have some type of arrangement where you have the corporation manage the property and everything is filtered through the corporation. As you become more trustworthy it should be easier to eventually find a lender to lend to you in the name of the corporation. Find a good accountant and discuss your ideas and plans with him/her to get a better idea as to where to begin.
- Anonymous1 decade ago
If you purchase the property without financing, then LLP or LLC will probably be the best structure. However, IF you are your partner(s) plan to seek financing for any part the of the purchase - you will be hard pressed to find a lender that will lend on multi unit housing under an LLC and the like without business history (tax returns) and substantial assets in the entity's name.
You have two primary concerns, financing and liability protection (structure). All parties involved in the purchase need to seek the advice of an accountant for tax strategy applicable to each of the partners and then move forward.
I am a nationwide lender (excluding, WV, MD, ME, HI and AK) with commercial products.
What most investors do is purchase the property in the individuals names, then deed the property over to the LLC, Trust whatever veil of structure works best for the parties involved.
Hope that helps -
866-294-0011 ShannonSource(s): Mortgage banker for 5 years, controller 15 years
- 6 years ago
Rentable houses, lofts today are being made out to be in everybody's scope. Visionaries are stating that, these times will be known as "The age of the business person!" Maybe these variables are genuine and possibly they're not. I'm simply going to bring some top calls attention to that you may need to consider if this is the street you wish to take after.
The most vital thing to consider is, to focus your resistance level. The more units you have will doubtlessly spread the dangers of you never getting into the issue of having an excess of opportunities at one time. Where as though you claimed a solitary rent house and your leaseholders moved out amid the center of the night, then it may take six months to discover an alternate occupant. This would not be a decent on your money stream!
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- 1 decade ago
You need to do research at library then join local Real Estate group. But I would suggest corp.