What is the best corporate structure for real estate?

When choosing a corporate structure, it is important to understand the purpose of each form. You have a few options to choose from: sole proprietorship, LLC, or C-Corp/S-Corp. Keeping in mind your ultimate goal, you should obviously choose the form that is best for you.

If you are holding a small amount of real estate for investment, you will want a different corporate form than if you are trying to become a real estate mogul.

Sole Proprietorship

  • the simplest business form
  • best for smaller scale operations
  • owner has unlimited liability

LLC

  • stands for Limited Liability Company — so the owners’ liability is limited to the assets of the business
  • requires more setup work, but still simpler than C-Corp or S-Corp

C-Corp/S-Corp

  • these two forms are basically the same with small differences
  • these are full corporations with shareholders and investors and limited liability for the owners
  • requires a lot of setup work and procedures to follow
  • best for larger operations and if you will be bringing in other investors

Without more details, I would say pick LLC for your real estate holdings because it will give you, as the owner, limited liability without having to jump through as many hoops as in a C-Corp or S-Corp. But when you decide to setup your company, I suggest that you speak with a business attorney. For that, I invite you to check out LawTrades. We offer a free initial consultation with an experienced attorney and will provide project management from start to finish to ensure that your work is completed in a timely, transparent matter. Good luck and don’t hesitate to reach out for more information!