Archive for corporation

One of the big pitfalls of starting a small business, such as real estate investing, is how to protect your personal assets from your business investments, and the other way around. If you buy everything in your personal name, you run the risk of a single lawsuit wiping out not only your investment, but also your personal property. As such, I generally recommend that  all small business owners incorporate their business in some way as to provide maximum reasonable protection for your assets.

There is one good reason to buy property in your own name solely, and that is for a refinance.  If you buy real estate and plan to refinance the property to get cash out, or to pay off a hard money loan, almost all conventional banks will require the property be in your own name.  If you know this is your plan going in, then I recommend you buy the property in your personal name and keep it in your personal name until the refinance takes place. This will leave you exposed to the liability of the security deed, and any consequences of foreclosure or defaulting on the loan, but it is the only way to get the refinance done in the first place.  Buying originally in your own name will save you from troubles with possible seasoning issues down the road.  Even in this instance, I still recommend putting the property into a business entity of some sort after the refinance is complete. Read More→

Share