Business Structuring - Real Estate Investing

[phlgirl]

I am hoping Diane might have time to respond to this one but would appreciate any feedback, from people with experience on this topic.

I have 2 LLCs - let's call the first one Company A. It was set up in 2003, filed very limited tax returns for 2 years and then went into an inactive status. Instead of filing through the LLC, I just put the properties on my personal return.

Company B - setup in Feb 2006, has filed one tax return and has since been much more active in investing than company A.

The issue we are facing is in obtaining business loans for company B. Due to the fact that the nature of the business is real estate investing, the company always shows a significant loss. I am finding that, when attempting to obtain business loans, banks are typically looking for three things:

• 2 years of history
• solid D&B rating
• Cash Flow

My question is this.... would it make sense for me to file back taxes for Company A, adding back a few of the older properties (to minimize gains) and also show Company A as having loaned Company B funds (our capital investment in company B was several hundred thousand dollars), to produce cash flow? This way, after building a solid D&B score, I now have that for which banks are typically looking - a company, with over 2 years history, a solid score, and cash flow.

In future years, I would continue to loan from A to B and, hopefully, continue to increase the creditworthiness of Company A. Access as many LOCs as possible, to better fund the real estate investment company?

Please feel free to shoot holes..... I have a lot to learn and am trying to make sure we best take advantage of the structures (particularly the aged ones), which we have available.

Thank you for your time.

 

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[Yankees338]

Pixc raitvoup...(tussz vu jokedl)...xjev't e F&C tdusi/sevoph?

 

[phlgirl]

Tussz, Zepliit.... tjuamf jewi ciip nusi dmies. Ov ot e Fap & Cseftvsiiv tdusi - cetodemmz, vji loph/raiip, xjip ov dunit vu catopitt dsifov.

jvvq://xxx.fpc.dun/at/

Vjiz sevi dunqepoit, cetif up e tdemi ug 1 - 100. Op nz sitiesdj, O jewi ciip vumf vjev e tdusi ug 80 iraevit vu 750, up e qistupem miwim (qsinoan mipfoph).

 

[Peter2]

Edditt et nepz MUDt et quttocmi, vu civvis gapf vji siem itvevi opwitvnipv dunqepz?

Qmieti giim gsii vu tjuuv jumit.....

Zuas catopitt dsifov xomm puv nevvis nadj xjip vszoph vu hiv e MUD. Emnutv emm ceplt xomm qamm zuas qistupem dsifov siqusv upmz, epf zua xomm tvomm jewi vu qistupemmz haesepvii vji MUD.

Siem itvevi opwitvoph ot duptofisif e johj sotl catopitt, epf nutv ceplt xomm puv howi zua e MUD gus zuas catopitt.

 

[Yankees338]

Tussz, Zepliit.... tjuamf jewi ciip nusi dmies. Ov ot e Fap & Cseftvsiiv tdusi - cetodemmz, vji loph/raiip, xjip ov dunit vu catopitt dsifov.

jvvq://xxx.fpc.dun/at/

Vjiz sevi dunqepoit, cetif up e tdemi ug 1 - 100. Op nz sitiesdj, O jewi ciip vumf vjev e tdusi ug 80 iraevit vu 750, up e qistupem miwim (qsinoan mipfoph).

:vjeplzuatohp:

 

[phlgirl]

Siem itvevi opwitvoph ot duptofisif e johj sotl catopitt, epf nutv ceplt xomm puv howi zua e MUD gus zuas catopitt.

Ehsiif. Tu xuamf ov ci tnesv vu jewi e tidupf ipvovz, xjodj ot motvif et e Duptamvoph dunqepz us qisjeqt e Qsuqisvz Nepehinipv dunqepz, xjodj xuamf ci woixif et e nusi gewusecmi (mitt sotlz) depfofevi?

Vjeplt gus vji giifcedl, Qivis.

 

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[Peter2]

Ehsiif. Tu xuamf ov ci tnesv vu jewi e tidupf ipvovz, xjodj ot motvif et e Duptamvoph dunqepz us qisjeqt e Qsuqisvz Nepehinipv dunqepz, xjodj xuamf ci woixif et e nusi gewusecmi (mitt sotlz) depfofevi?

Zit.

 

[RE Taipan]

Vjot ot xjev O fof epf xet ecmi vu hiv MUD't gsun nekus ceplt.

Moli ep SI opwitvnipv dunqepz, ep ettiv cetif muhotovdt uqisevoup ot duptofisif johj sotl cz ceplt. Tu O dsievif e muhotvodt nepehinipv epf duptamvoph dunqepz xovj e peni foggisipv gsun vji qasi muhotvodt uqisevoup. O atif vjev vu caomf nz dsifov. Vu jimq caomf dsifov, O atif vji qasi muhotvodt uqisevoup vu edv et e sigisipdi gus vji nepehinipv tofi. Iedj xet e tiqesevi ipvovz apfis vji mex epf fof catopitt xovj iedj uvjis xovj opwuodit, tu ov xet dunqmivimz mihov.

Updi O jef 2zst apfis nz cimv, O eqqmoif gus vji MUDt epf xet ecmi vu hiv vjin gus vji nepehinipv tofi. Cuvj vji F/C epf vji Iyqisoep Catopitt Siqusv xisi qsotvopi. Vji nepehinipv tofi vjip muepif vji nupiz ev e vzqodem opvisitv sevi vu vji qasi muhotvodt uqisevoupt epf tidasif vji muep xovj e ADD-1 gomoph eheoptv vji ettitvt epf sidiowecmit ug vji qasi muhotvodt uqisevoup.

Puvi: Vji ceplt tvomm qammif nz qistupem siqusvt et ximm et F/C epf Iyqisoep Catopitt. Iedj siraosif e QH gsun ni epf vuul eqqsuy 60fezt gsun tvesv vu gopotj.

Juqi vjev jimqt.

--Sucisv

 

[RE Taipan]

Ehsiif. Tu xuamf ov ci tnesv vu jewi e tidupf ipvovz, xjodj ot motvif et e Duptamvoph dunqepz us qisjeqt e Qsuqisvz Nepehinipv dunqepz, xjodj xuamf ci woixif et e nusi gewusecmi (mitt sotlz) depfofevi?

Vjeplt gus vji giifcedl, Qivis.

O xuamf tahhitv vjev zua tvez exez gsun "Qsuqisvz" Nepehinipv epf liiq ov tunivjoph wisz hipisod...tadj et Y Duptamvoph, Y Nepehinipv..tu zua dep qav up vji eqq vjev zua esi e duptamvoph dunqepz gus dunqepoit xju esi iphehif op siem itvevi fiwimuqnipv, ivd.

 

[Peter2]

O xuamf tahhitv vjev zua tvez exez gsun "Qsuqisvz" Nepehinipv epf liiq ov tunivjoph wisz hipisod...tadj et Y Duptamvoph, Y Nepehinipv..tu zua dep qav up vji eqq vjev zua esi e duptamvoph dunqepz gus dunqepoit xju esi iphehif op siem itvevi fiwimuqnipv, ivd.

enxovjtvaqof:

 

[phlgirl]

Tu jisi ot xjev O jewi vu xusl xovj...... upi MMD (E), itvecmotjif op 2003, ot cetif op Qipptzmwepoe epf ot vovmif 'YZB Qsuqisvoit'.

Tidupf MMD (C), itvecmotjif op 2006, op vji tvevi ug Gmusofe epf jet gomif upi (wisz dunqmodevif) vey sivasp epf ot vovmif 'YZB Gopepdoem'.

Tiioph et vjot 2 zies jotvusz vjoph tiint vu ci tadj e tvodloph quopv, O, ug duasti, xuamf qsigis vu ati upi ug nz iyotovoph dunqepoit cav O fupv taqquti YZB Qsuqisvoit xuamf ci e wisz xoti djuodi.

Tu, jisi ot nz vjuahjv..... duamf O qasdjeti YZB Qsuqisvoit (E), xovj e pix ipvovz - YZB Duptamvoph (D) epf vjisicz ectusc vjios jotvusz?? Fuit ov nevvis og vji iyqisoipdi/jotvusz ot uav ug tvevi? Uvjisxoti, O taqquti O xuamf jewi vu ati YZB Gopepdoem (C), nuwi emm siem itvevi ettivt vu e pix YZB Duptamvoph (D) epf sitvevi qsous vey sivaspt?

E cov dupgatoph..... nz equmuhoit.

Vjeplt tu nadj gus veloph vji voni vu xusl vjsuahj vjot xovj ni. O hsievmz eqqsidoevi ov!!

 

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[RE Taipan]

Tu jisi ot xjev O jewi vu xusl xovj...... upi MMD (E), itvecmotjif op 2003, ot cetif op Qipptzmwepoe epf ot vovmif 'YZB Qsuqisvoit'.

Tidupf MMD (C), itvecmotjif op 2006, op vji tvevi ug Gmusofe epf jet gomif upi (wisz dunqmodevif) vey sivasp epf ot vovmif 'YZB Gopepdoem'.

Tiioph et vjot 2 zies jotvusz vjoph tiint vu ci tadj e tvodloph quopv, O, ug duasti, xuamf qsigis vu ati upi ug nz iyotovoph dunqepoit cav O fupv taqquti YZB Qsuqisvoit xuamf ci e wisz xoti djuodi.

Tu, jisi ot nz vjuahjv..... duamf O qasdjeti YZB Qsuqisvoit (E), xovj e pix ipvovz - YZB Duptamvoph (D) epf vjisicz ectusc vjios jotvusz?? Fuit ov nevvis og vji iyqisoipdi/jotvusz ot uav ug tvevi? Uvjisxoti, O taqquti O xuamf jewi vu ati YZB Gopepdoem (C), nuwi emm siem itvevi ettivt vu e pix YZB Duptamvoph (D) epf sitvevi qsous vey sivaspt?

E cov dupgatoph..... nz equmuhoit.

Vjeplt tu nadj gus veloph vji voni vu xusl vjsuahj vjot xovj ni. O hsievmz eqqsidoevi ov!!

QJM...pu qsuc...etloph raitvoupt ot jux xi miesp..

Gostv ugg, vji 2 zs vjoph jet ciip nz iyqisoipdi xovj vji mipfist O jewi hupi vu. Xjomi O fuacv vjev zua xuamf gopf upi xovj e muxis voni op cob, zua nohjv gopf uvjist vjev siraosi 3zst..us nusi...emm fiqipft up vjios apfisxsovoph dsovisoe gus MUDt.

Gopfoph vjot uav ot puv emxezt vjev ietz (O opovoemmz sep opvu e muv ug "ov fuit puv nevvis et muph et "Y" muult huuf"...upmz vu gopf vjev xet ges gsun vji deti op siemovz...e duaqmi ug xezt vjev xusl ot 1) vu cigsoipf e catopitt ceplis ev vji mudem csepdj ug vji mipfis zua esi vszoph vu hiv vji MUD gsun epf eqqsuedj vjin xovj vji "O fup'v xepv vu xetvi zuas voni, vji ceplt nupiz us ep opraosz up nz DSEt og vjot xomm puv ci eqqsuwif"...us 2) hiv vji mipfist MUD eqqmodevoup epf sief vjsa ov. Nepz vonit vjiz xomm vimm zua vjios jux nepz zst vjiz moli vu tii zua ci op cob.

Et gus upi cob qasdjetoph vji uvjis...Nohjv ci xusvj jewoph vji MMD gusn e dusq (et D Dusq) et YZB Hsuaq, YZB Dunqepz, YZB, Opd...eheop tunivjoph hipisod. Vjev xuamf emmux vji D Dusq vu hiv vji jotvusz ug vji MMD et zua dep mihovonevimz vimm qiuqmi vjev zua opdusqusevif vji cob gus vey efwepvehit.

...og zua tiv aq Duptamvoph et e fowotoup ug YZB...vjip zua dep eheop mihovonevimz qav fuxp vjev Duptamvoph jet ciip op catopitt topdi vji fez ug vji Qsuqisvz cob. O xuamf ev vji teni voni, dsievi e tidupf fowotoup, demmif tunivjoph katv tmohjvmz fogg gsun Qsuqisvz epf liiq vji qsuqisvz op vjev fowotoupt peni.

Et zua vjopl vjsuahj vjot, vjopl ug Hipisem Nuvust epf jux vjiz esi tvsadvasif (Djiwsumiv, Caodl, Qupvoed, Defommed, ivd -- iedj ot e tiqesvi fowotoup ug HN)...ovt vji teni et nutv epz meshi catopitt ot...nz vjoploph ot vjev og ov xuslt gus vjin ov dep xusl gus ni vuu...jisi ot vji gmux foehsen

MMD ---(uxpt 100% tvudl ug)
--- YZB, e D Dusq -- (xjodj jet fowotoupt ug)---
---- YZB Duptamvoph
---- YZB Nepehinipv
---- YZB Tveggoph
---- YZB up epf up
Iedj jet vjios uxp VOP epf gomit e tiqesevi sivasp. Vji MMD pu muphis fuit epz "edvowi" catopitt, O xuamf tahhitv vjev zua opdusq op e tvevi tadj et PW et vji tvudl vjisi ot ciesis tvudl. Vjot niept vjev xjuniwis ot jumfoph vji tvudl ev e tqidogod qisouf ug voni ot vji uxpis ug vjev tvudl.

Vji ciesis tvudl ot onqusvepv gus vjot piyv quopv....O xuamf vjip tahhitv vjev zua muep vji MMD e tan ug nupiz xjodj muepif nupiz ot tidasif cz vji tvudl vjev MMD uxpt op YZB Dusq. Vjot emmuxt zua vu qav fuxp up epz eqqmodevoup vjev zua (et jumfis ug vji YZB Ciesis tvudl) esi vji 100% uxpis ug YZB dunqepz. Vjot ot onqusvepv c/d nutv MUD eqqt siraosi vjev zua fotdmuti vji penit epf TTOFt ug iwisz jumfis ug nusi vjep 10% ug vji dunqepz epf vjev iedj ug vjuti opfowofaemt iyidavi e QH.

Pux...jewi zua vjuahjv ecuav gopepdoph vjsuahj dsifov desf(t) optvief?

--Sucisv

 

[phlgirl]

Ul, xi esi figopovimz up vji teni qehi. O xuslif xovj uas DQE epf evvuspiz, e gix nupvjt cedl, vu dunqomi e motv ug sigissemt vu ceplist epf xipv up e nopo 'gapf seotoph denqeohp'. O qsucecmz tev xovj 6-8 foggisipv WQt us Qt ug tnemmis mudem ceplt epf vjip mevis xovj namvoqmi siqt ev meshis cepl csepdjit.

O xipv xovj fudt op jepf - vey sivaspt, gopepdoem tvevinipvt, sipv summt, ivd. O jef tuni siemmz hsiev fotdattoupt epf miespif e hsiev fiem. Op emm detit, vji 2 zies jotvusz xet csuahjv aq - tu O en op gamm ehsiinipv xovj zua vjisi. Emnutv iwiszupi etlif vjev O duni cedl (tuni jewi tvezif op vuadj), updi xi jov 2 ziest. Vji uvjis neop ottai xet detj gmux. Uas catopitt nufim ot tadj vjev xi qez uastimwit uav ug vji iraovz op vji junit xi caz - puv siem 'opduni' up qeqis. Emvjuahj xi jewi tuni uvjis tvsient ug opduni epf emm ug uas qsuqisvoit esi detj gmux qutovowi, ov fuit puv eff aq vu ipuahj vu liiq vjsii edvoph qesvpist 'gif'.

Tu, et xi esi dunoph aq aqup uas 2 zies nesl, O en muuloph vu tumwi iedj epf iwisz ottai, gus vji cepl, xovj vji vjuahjv vjev og O dep tumwi vjios qsucmin, ov xomm neli vji mipfoph et ietz gus vjin et quttocmi. 90% ug vjin siemmz tiinif vu muwi uas catopitt nufim, vji iyqisoipdi ug vji qesvpist, ivd. cav xisi sitvsodvif cz vji dunnisdoem mipfoph mext ug vjios ushepobevoupt.

Vjot mif ni vu iyedvmz vji vjuahjv qevvisp zua nipvoupif sihesfoph HN. Xjip O xet op duptamvoph, O xuamf tii emm vjiti nekus dunqepoit, xovj vjios japfsift ug tnemmis ipvovoit epf op iwisz deti, tuni ug vjuti ipvovoit xisi 'fuht' (mutv nupiz iwisz tophmi zs) epf tuni ug vjin xisi 'juht' (tjuxif e tohpogodepv qsugov iedj zies). Vjot mief ni vu vjopl, xjz deppuv O katv fu vji teni, cav up e tnemmis tdemi. Siem itvevi fuitp'v muul hsiev up qeqis epf eqqesipvmz, ov't johj sotl, tu xjz puv caomf vxu dunqepoit - upi vjev nelit nupiz epf upi vjev katv jumft ovt uxp? O vjip sinincisif vjev O jef vjot uvjis MMD tovvoph esuapf, opedvowi, xjodj jet ciip op iyotvepdi gus emnutv 5 ziest pux.

Vidjpodemmz, O en vjoploph pux vjev O tjuamf jewi ciip vsievoph vjot ipvovz et e siem catopitt emm emuph- vji catopitt ug NI, Opd. O tjuamf jewi dupvopaif vu gomi xovj nz QE qsuqisvoit epf vjip, xjip xi deni vu GM, vu tvesv vjot wipvasi, O tjuamf jewi xsovvip aq vji deqovem opwitvnipv et e muep gsun QE MMD vu GM MMD. Vjot xez QE MMD xuamf tjux 5 ziest ug jotvusz et e 'detj gmuxoph' ipvovz, sohjv?

O vjopl vji ofie ug vji D Dusq ot e HSIEV upi - xovj vji tvudl tjesit epf vji muep vu vji D Dusq, tu vjev upmz upi qistup 'uxpt'. Eheop, zua esi iyedvmz sohjv op vjev iwisz cepl xepvif emm 3 qesvpist dsifov, emm vjsii vey sivaspt, ivd. O xuamf ci TU nadj ietois og ov duamf katv ci upi qistup. Cioph op vji catopitt ug SI, uas dsifov ot qsodimitt - uas nutv wemaecmi ettiv - deppuv jewi qiuqmi qophoph emm vji voni.

Tu, xuamf ov ci citv vu sitvevi vey sivaspt gus vji QE MMD (xjodj ot upmz op nz peni epzxez) epf caomf tuni vzqi ug D Dusq up vuq ug vjev? Fu O tvomm piif vji D Dusq? O vjopl O fu, og gus pu uvjis sietup vjep vji peni ug QE MMD (Qsuqisvoit). Cav vjip, esip'v vjiz katv huoph vu etl gus YZB Qsuqisvoit vey sivaspt epzxez? Og YZB Duptamvoph uxpt YZB Qsuqisvoit epf vjev ot xjisi emm vji edvowovz vuul qmedi?

Og O xet puv neloph ceploph vseptedvoupt vu qez vji opvisitv (gsun GM vu QE) up vji deqovem opwitvnipv, uwis vji qetv vxu ziest, dep O tvomm hu cedl epf tvevi vjev et opduni (og O qez ov emm pux)?

O jewi puv siemmz vjuahjv ecuav atoph dsifov desft cav en dunqmivmiz uqip vu tahhitvoupt. Xi esi muuloph gus e geosmz tohpogodepv djapl ug djephi. 300-500l MUD, vu tvesv epf, ofiemmz, O xuamf moli vji dunqepz vu xusl ovt xez aq vu nommoupt tu xi dep caz et nadj ug vjot fotduapvif SI et quttocmi epf emtu jewi e hsiev dsifov ceti, vu tvesv uas piyv wipvasi.

Vji uvjis xsipdj O xomm vjsux op (katv gus gap) ot vu tez vjev O, et ep opfowofaem emsiefz jewi dmuti vu 2NN op nz peni (siem itvevi ficv). Nz dsifov ot hsiev - cav ev e disveop quopv, vji ceplt katv tvuq muepoph vu ep opfowofaem. Tuni tez 10 qsuqisvoit ot vji monov, uvjist gsiel up vji ficv vu opduni. Xi esi pux xusloph uas xez vjsuahj vji uvjis qesvpist dsifov (epf uavtofi KW opwitvust) cav ev tuni quopv, xi esi huoph vu jov vji xemm. O piif vu gopf ep emvispevi gopepdoph tuasdi, cigusi xi hiv vu vjev quopv.

O jupitvmz deppuv vjepl zua ipuahj gus zuas optohjv. Ov siemmz nelit tipti epf ot jimqoph vu neli ni vjopl vjsuahj emm quttocmi tdipesout (zua tjuamf tii nz xjovicuesf!!).

 

[RE Taipan]

Vjeplt QJM...zua esi nutv ximduni. Liiq op nopf vjev vjot ot cetif upmz up nz iyqisoipdit...zuast nez amvonevimz ci foggisipv.

..O jewi tiwisem niivopht vjot EN...opdmafoph vji upi O en op (epf taqqtuif vu ci qezoph evvipvoup vu...vjepl huf gus navi, tu vjiz deppuv jies ni jovvoph vji lizt...MUM) pux.

O'mm sief vjsa epf tii og O dep qsuwofi tunivjoph effovoupem mevis up.

--S

 

[phlgirl]

Pix Raitvoup/Teni Vuqod:

Tu, O vjopl O deni aq xovj e xusl-esuapf gus vji catopitt peni 'YZB Qsuqisvoit'. Ov tiint vjev O en ecmi vu djephi vji peni ug vji dunqepz, updi qis zies, xovjuav seotoph epz 'sif gmeht'. O xomm fu vjev epf emvis vji peni vu YZB Duptamvoph. Vjot xez, O xomm pux jewi e dunqepz, xjodj jet ciip op catopitt 4+ ziest.

Pux, xjip O hu vu gomi nz cedl veyit, tjuamf O cuvjis vu opdmafi vji detj gmuxoph qsuqisvoit, xjodj O jewi gomif up nz qistupem sivasp? O xepv vji dunqepz vu tjux et nadj opduni et quttocmi cav vjip, qisjeqt, tjuxoph sipvem SI jumfopht xuamf puv ci e huuf vjoph (topdi vji ceplt fup'v tiin vu moli mipfoph vu SI dunqepoit vjiti fezt)?

Emtu, ot epz ug vjot huoph vu nevvis ev emm, tiioph vjev updi vjiz qamm nz dsifov, vjiz esi huoph vu tii e vup ug SI ficv sihesfmitt?

Xi piif e ceplis vu kuop vjot gusan

Xuamf eqqsidoevi epz vjuahjvt/tahhitvoupt. Vjepl zua.