So you’ve decided that you intend to invest in real estate. It could be that you will be still working a full-time job or you’re running a company that at this time takes up most of your time. Don’t make the mistake of treating your brand-new venture as a part hobby. Diversifying and building your wealth with real estate is one of the greatest things you certainly can do for your future.
Buying investment real estate is definitely an activity that should be treated as a company and not a hobby. The mistake that many newbie investors make is that they’re just making it up as they go along and are not taking the time to accomplish their homework on what to setup their business before they begin looking for properties.
It is important not to only structure your organization well before going out buying properties, but also to ensure that you place forth the absolute most professional image possible. There are always a large amount of aspects to doing this well that I share with my clients, and I will share just a couple of simple strategies with you here https://duan-sungroup.com/.
First, every new business in case you have a name. Choose a name that reflects your investing goals, the industry, and make sure you stay away from words that will have legal implications (ex. “Realty”). Also, make sure you check the accessibility to the name with your local Secretary of State. This is a significant first faltering step, because this is actually the name you use with from registering your organization with your state to opening your bank account. You never want tenants making payments made payable to you personally.
That leads us into my second recommendation. Given that you’ve a company name and have ideally registered it with the state, you will also want to keep your organization expenses separate from your own personal expenses. The easiest way to do this is to open a company bank-account separate from your own personal bank-account, and ensure that you have all income and expenses for your properties and other business related expenses flow through it. Don’t make the mistake of mixing your own personal and business expenses, because should you ever be audited by the IRS you may lose some or even all your legitimate business expenses.
When I began investing some years ago, one of many first things I did was create a name and open a bank account. It gave me a specialist appearance to every one of the vendors and customers I arrived to contact with, and a good way to start accepting payments and tracking expenses.
Lastly, I suggest ending up in an attorney (real estate or trust & estate) to determine the very best legal entity for your own personal circumstances. Many real estate investors work with a Limited Liability Company (LLC) due to the limits on their personal liability in the case of a legal suit. Again, check with your attorney to determine what will work best for you personally, but make certain you don’t own your investment properties in your own personal name.