Entities, Profits And Taxes ...
I have a few questions about setting up and LLC, S-Corp, or some other entity and the tax advantages and potential write-offs they provide.
I have been scouring the boards for a week or so trying to find the answers, so any assistance would be greatly appreciated.
I am interested in buying multi-family properties, but I would like to minimize the income from the properties so that I can 'shelter' the profits from taxes.
I understand that LLCs and S-Corps are 'pass-through' businesses so the profits will look like income on my tax returns. Whether I have an LLC/S-Corp or not I will be able to write off the interest on the mortgages.
So, what advantages does an LLC/S-Corp provide?
I assume I can write off part of my own home as an office and possibly some other bills like a cell phone, mileage, etc.
But, can I defer the income into some sort of tax-deferred account? Or, can I use the money to fix up the properties or buy new ones and write if off that way?
Also ...
If I do decide to start an LLC, should the LLC buy the real estate. If so, how do I go about getting financing and what type of LTV should I expect to get?
If I decide NOT to start an LLC can I buy the properties now outside of an LLC and transfer them later if I decide to start an one?
I know this is a lot for one post and maybe I should break it up, but if anyone can provide me with some good insight I would really appreciate it.
Thanks-
CT_Invester
To minimize the cash flow coming off your Multifamilys, increase the amount of your loans to the point where you are just about a 'Break-Even'
Most mortgage companies/banks will not give a mortgage to an LLC without a considerable track record or an extensive portfolio to prove your methods and provide the security they need, but,
most of them will allow you to transfer the ownership to an LLC after the closing to allow for the properties 'protection.'
Quote:
On 2003-07-29 15:32, pmatheson1 wrote:
To minimize the cash flow coming off your Multifamilys, increase the amount of your loans to the point where you are just about a 'Break-Even'
pmatheson1-
do you mean that I should put less money down so that I increase the size of my interest deduction?
that sounds like i want to try to make my rents equal the mortgage. don't I still want to charge more in rent if I can get it?
and, if I put down less than 20% won't I have to pay PMI?