I’m really excited about delivering an insider’s perspective as this investment group is progressing. Very few people get to see the inner machinations of real estate investment deals, so I’ll be reporting not only as a way of telling the story, but also as a way of educating others about the nitty-gritty of real estate investing.
We spent considerable time recently conducting in-depth conversations with our accountant. In any sort of investment work today, you have to bring in accountants’ expertise. It’s my job to make sure my clients get profits; it’s the accountants’ job to make sure they keep as many of the profits as possible.
We actually have some nice flexibility regarding how we set up the company. As an LLC, we have to pay taxes, but only on a pass-through basis, which means investors are the ones liable for the taxes. On the other hand, we could also create what’s called a C corporation, designating a specific fiscal year-end date for distributing capital. Doing so lets us schedule the triggers for tax payments. This doesn’t avoid taxes for our investors, but it can potentially defer them for almost twelve more months.
We’ve ordered what’s known as the tape (the roster of properties), and soon we’ll see the properties we’re purchasing. We’ll conduct our due diligence, doing as much as we can to determine their actual and potential value. Then we’ll unleash the company that will post the signage indicating their availability.
That’s a look at some of the structure of the company. Check in next week to learn about the infrastructure of the company.
