Hello Everyone, sort of new to the site but I have been reading the postings for 2 days now. Think I've grasped the necessary concepts but I have a tendency to put the cart before the horse. I want to make sure I do this correct going forward. I recently incorporated my business July 2008. I opened a business checking/savings account with Chase. I already had a business 800 number for my company with FreedomVoice Systems and was using a UPS Store for my business address. My fico scores are 715 745 738. I was instantly issued a business credit card for $15,000 upon opening the business account. I phoned D&B to request my Dunns number and of course I was told the story of how I would not build or establish credit the correct way without utilizing their creditbuilder program for a whopping 599 or so. I told them I would get back to them. I attempted to do it myself but wanted to make sure I do it correctly. I'm glad I paused and was able to read the information on this website. I want to ensure I set up my company information correctly.
1. Do I need to change my company address from the UPS Store to my home address?
2. Realized my 800 number is not listed in business directory if FreedomVoice can publish number can I keep it for business number and have bill mailed to my business address as opposed to being emailed to me?
3. Is it better to utilize a land line number at my home address for business? Or better yet, should I get another cell phone and use as my business number?
3. Will the number of employees or the nature of my business affect my credit limitations when it comes to applying for credit lines and credit cards from banks in the future?
My corporation was set up to manage LLC's that will hold my other rental investment properties. It will also need access to cash to do real estate transactions (aquisition and rehabbing of properties, quickturns etc.) I read somewhere in one of the threads that Real Estate Investors have to be careful how they list the nature of their business not to list it as Real Estate but as a design consultant or something.
4. Is there any validity to this statement? Also dont want to get labled and taxed as a dealer
Once I get set up correctly and get the answer to these questions I will on my way. The information provided on this website has truly been a blessing and definitely helpful.
Thank you to everyone who took time to share this information that many attempt to charge people a fortune for. May your business flourish and prosper for you have taken time to give back and help others get on their way to success as well.
Hello Miss Linda,
I am also a full-time real estate investor. I am not sure about the other questions, but the fear of being labaled a "dealer" by the irs can definitely be costly, because of losing depreciation, having to show property as "inventory" instead of as an investment, etc. along with a few other bad things!
I would do your "flipping" in one entity, and hold rentals in another, or several other, completely seperate ones. If you only flip a few houses a year, you probably don't have to worry much about dealer status, but once you start doing more and more, you may want to form numerous entities and flip some in one, some in another. One entity can be tagged as a dealer, and you can simply set up another entity to replace that one, and never use the dealer entity again.
Hope this helps,
PS, where exactly are you in NY, I'm in PA, adn always looking for investors to network with, I may even expand my business into NY in the near future.