Home Course Llc | online education,home study and career training ...

admin answers:

Hi Angie,

This is a common question for most new businesses. First lets find out where you and your company are at.

1. Do you and your husband own the rental property now.
If so, fine. What you need to do is to sell the property to your company. A very common transaction. Contact a real estate lawyer to do this for you.

The reason you want the Company to own the real estate is two fold. 1. You want the company ( I always recomend a S Corp. ) to own the real estate so that it provides you with the veil of corporate protection. Plus you wll have bought business insurance. Most polices will cover almost all contingencies. Look in @ yellowpages.com for listings for brokers and companies. ( I always recomend Erie )
2. With the company owning the real estate, paying the mortages, this builds credit for the company.

Also having a S. Corp is very easy for you to have money flow to you. It is reported on your Fed returns on a Schedule K. You are allowed to draw salary, pay benifits such as health & life and auto insurance. It will allow you to expense many many things through the business to reduce your tax exposure.

If you are starting out in the rental business, things will be a little different.

Your company will have ?NO CREDIT HISTORY? Lenders will only lend money for property based on ?the ability to pay?
In the rental business, the lender will look at the cash flow of the rental property.

EG: You want to buy a city property with 4 upscale apartments for $500,000. The rent on these apartments generate $4,000 a month. That is $48,000 a year. With 10% down on the property (50,000) you have a mortage of 450,000 plus a interest rate of aprox 6.5% for 20years.

The cash flow of 48,000 is more then enough to support the loan. (1,875 plus interst which brings to 2,000) You only need to have 2 apartments rented to meet the loan.

The lender will look at the calculation, the location of the property, and will look at the property itself.

If you have the down payment and a reasonable credit history, you should be able to do this with little risk to your own home.

The ?property? is what is at risk.

I started out as a business & real estate broker 25 years ago. I have bought and sold ten?s of millions of $ of property. I started out just like this.

You can move forward by remodleing the apartments, thus increasing the value of the property, raise the rent or just sell the property hopefuly for a profit and move forward. Once your company has a hisory of cash flow, and paying of debt, obtaing credit will not be a problem.

Good luck, let me know if you have any more questions.

Source: http://www.akresourceedu.net/home-course-llc.html

orioles atlanta braves national coffee day national coffee day paw paw paw paw baltimore orioles