Company: One way to limit your legal and financial liability is to purchase property as a company. A company may attract a lower rate of tax on any net rental income from the property, and individuals will be protected from liability, to an extent.

Can a business name own property?

A business name is simply an alias of the business owner. Such a business entity is in fact and at law the same person as the owner(s). It does not enjoy separate legal existence nor can it own property. It is also neither capable of suing or being sued to court nor does it enjoy perpetual succession.

When do you need a real estate entity structure?

Flipping a property inherently means having lots of different third parties working on the property, so another major component of selecting the right entity structure is mitigating that liability as much as possible. Right off the bat, when a client tells me they flip real estate, my first thought is that they need a traditional C-corporation.

How to choose the best real estate flipper entity?

Here’s how. House flippers’ asset protection strategies should reflect their actual needs. Here’s a short checklist for you to consider before you start with entity formation. When you form your real estate entity, consider how it will fit both within your asset protection and broader investment strategy.

Can you have more than one real estate company?

As a general rule, you don’t want to have more than one project in the same entity. This separation provides greater asset protection. If you’re doing multiple flips, each project should be held in its own limited liability company (LLC). These LLCs should then be disregarded to your C-corporation.

What’s the best way to structure multiple real estate?

Each LLC should own only one property and not engage in any other business activity. This is the best way to contain your liability and maximize your protection. To understand the reasoning, let’s get back to the basics and think about why a real estate investor forms an LLC in the first place. It’s all about minimizing personal liability.