Question by Bdd: How do you start a real estate holding company and a real estate development company, can I combine the 2?
I am 14 and when I get older I would like to start a real estate holding company LLC and a real estate development company LLC. How much money would I need to start one? With the real estate holding company do I get capital gains? Also I would like it to be publicly traded. So what is the best way to go about doing this?

Best answer:

Answer by Jim Bob
Wow! what a great question from a 14 year old. a LLC (Limited Liability Company) is incorporated with the Attorney Generals office in the state it is established in. The best way to do that is to go to an Attorney. A holding company and a Development company may be combined into one, have different division or groups to do the different objectives, or even the same people.

You can never have too much money to start a company, it’s the too little that matters. Your best bet is to save as much as possible, write up a business plan, go to friends and family for investment in the company before you start out and hope to have a minimum of ,000 to 0,000 to start your company. Then you can go to a bank and borrow, usually 2 to 3 times that much more to make your first purchases.

Yes there are Capital gains even for companies to pay with investment properties.

When you are ready, have your board of directors vote to take your company public by registering with the Securities and Exchange commission, with the assistance of a Stock Brokerage Company.

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Question by mrflip: Would a c-corp work for someone “flipping houses” for tax benefits?
I am looking into the business of flipping houses, so after reading more into it I see that it is recommended to operate under a “c-corp”. After talking to a CPA they said it would make no sense as I would be double taxed, both on the corporate profit and my personal income from the corporation. Why is it that most real estate books recommend c-corps then for tax breaks on buying and selling houses?

Best answer:

Answer by bostonianinmo
Probably because most real estate books are not written by tax experts. Sadly, few of them are written by real estate experts either, but that’s another story.

You’ll pay higher tax rates in a C-Corp, plus there are no personal exemptions or deductions so the first dollar of profit is taxed. You will have to pay yourself a reasonable wage but any other funds you take out as dividends are taxed twice, once as income of the corp and again as taxable dividends to you.

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