Structuring for the New Real Estate Investor

Congratulations!  By deciding to invest in real estate you have taken your first step on the road to personal wealth.  You have also put yourself in line for more advice than you ever thought you needed:

“If you buy rental real estate, you need to put it into an LLC.”

“That’s not right. Max out your insurance and you’ll be fine.”

 “If you put the real estate into an LLC the bank will invoke the due on sale clause for your mortgage.  You’ll have to come up with all that money immediately.”

 “Just put the property into your family trust.  That’s all the protection you need.”

How do you decide what to do?  Everyone seems to know what they are talking about, but there is so much conflicting information. Who do you believe?  Who do you trust?

You need to talk to professionals.  Professionals have answers, not just opinions.  While friends, relatives and other investors are well meaning and sometimes well informed, it is important to understand not only what your options really are, but also why you should consider one option over or in conjunction with another. 

The principals at Your Entity Solution, LLC are professionals who specialize in helping you to lower your taxes and protect your assets so you can grow your wealth faster and leave a legacy for the future.  We believe you should have choices about what to do with your money, and that starts with the right entity1 structure. 

1An entity is an organization with an identity separate from the identities of its owners or members.  In this context we mean a corporation, a limited liability company, a limited partnership or a trust.

Structuring is not a one size fits all activity.  As a new real estate investor, people may be tempted to slot you into a specific hole, but you aren’t buying your property in a vacuum.  You have a life and you have plans.  We want to know where you are today and where you are going in the future.  That’s why we ask you to invest 30 minutes of your time discussing your plans.  We want you to understand not only what you need today, but also what you will need tomorrow and the day after that.  We also want you to understand why you need these entities, what the alternatives are, and what the triggers are to come back and talk to us again or take some other action.  Once you have this basic road-map you can make intelligent decisions to move forward.

When we receive your decision on where you would like to start, we begin the process of filing your first entity.  We prepare and file the state documents, secure your Federal Employer Identification Number, prepare the required IRS forms if we need to change a default tax election, and prepare your minute book. 

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