Starting a Business, Should it be a Corporation, Partnership, LLC?
In this crazy economy many people are getting laid off and deciding to follow their dreams and start the business they have always dreamed of. So what should you be thinking about when starting a business?
One of the first decisions you will need to make once you decide what the business will be is how the business will be run. A big part of that is whether the business will be a sole proprietorship, a corporation, a partnership, or an LLC. So what are the pros and cons of these different types of businesses.
Sole proprietorship - This is often a great starting place for small businesses. With this business form there is one owner who is liable for all debt incurred by the business but also gets the benefit of all the profits. While this can be a great way to start a business, you need to consider that if the business is sued or something happens, the owner is strictly liable.
Partnership - This business form is for a business with one or more owners. Like sole proprietorship this form of business also requires that at least one owner is liable for any debts incurred by the corporation. This partner is called the general partner. Partnerships can have several limited partners and general partners but there must be at least one general partner. Limited partners are not liable for the debts of the partnership.
Corporations - This form of business has limited liability for the owners, who are called shareholders. This means that the shareholders can not be liable for more than their contributions to the corporation. However, on the negative side, income earned by the corporation is taxed as well as dividends distributed to the shareholders.
LLC - This is a relatively new business form. LLC allows the business to have limited liability and the business owners can elect whether they want to be taxed as a corporation or a partnership if there are two or more owners or a corporation or disregarded entity (sole proprietorship) if there is one owner.
If you are considering forming a business, it is best to check with your local Small Business Administration, local Chamber of Commerce, or a lawyer for information on properly forming a business.
Investing for Retirement - Real Estate
Real estate prices are falling, stock prices are falling, so where can I put my money? While few people have money to play with these days, it doesn’t take a lot now to have some nice savings later.
Yes, market prices are dropping. While this isn’t a great market for people trying to sell, it is great if you have money to spend and it doesn’t cost as much as you might think.
Real Estate Auctions. If you have some money set aside for a down payment, consider checking out auctions. You can get some excellent deals as long as you have money for the initial payment and can come up with a mortgage or the remaining balance within 30 days of the close of the auction.
http://www.williamsauction.com/ This website has auctions on a monthly basis with some properties starting at $1,000. While the lower end auctions often need rehab work, if you are not interested in rehabbing, there are plenty of other properties in very good condition. Check back every month for the new properties because while there might not be something you are interested in one month, the next month there might be several.
When attending auctions in person or online, you need to first check out the property you are interested in. Look for any repairs that will be needed to modify the property for your needs. If you are going to rent out the property, does it have appliances, are new carpets needed, what repairs are necessary to make it hospitable. You need to take all these costs into consideration when determining how much you are willing to bid on the property. Once you know all these expenses, determine what you are willing to bid and stand firm. In these auction settings it is easy to get caught up in the excitement and desire to win, however, you can’t let that cloud your judgment. Once you have determined what you would like to pay, you should also determine the absolute most you would be willing to pay and still be profitable.
Real estate auctions can be a great way to find a vacation home at a great price or to start developing a few properties to rent out for some extra income.
Going, Going, Gone. House sold for $10,000!
Pinch me, I must be dreaming. A 4 bedroom 2.5 bath home with over 2,000 square feet built in 2006 is going on auction starting at $10,000. This isn’t just a rare deal, there are plenty of others available as well.
In this current market life is pretty tough if you don’t have any savings to fall back on. For those that do have a little cash lying around though, there are plenty of opportunities to invest for retirement. One of the best options that I have seen is the Florida housing market. Yes, house values are falling like crazy in Florida and getting a mortgage is incredibly difficult, however, rental rates have not fallen and people who have been foreclosed on still need a place to live.
The Cape Coral/Fort Myers area has 58 houses and 44 lots going up for auction this month. Many of these homes have never been lived in and the auctions are starting at $10,000 or $25,000 for houses and $1,000 for a lot. With so many homes being auctioned at once and the market already saturated, it is very possible that people will be walking away next weekend with a house for only $10,000 plus closing costs!
A quick check on Craigslist shows that houses in the area are renting for $950 a month for a house or $500 a month for a two bedroom condo. Even if you rent the house out for $500 a month, the potential for future earnings is enormous.
Florida isn’t the only area in the country with some great auctions going on. Check out the following website for more info.
http://www.williamsauction.com/Search/SearchResultsState.aspx?statusid=1&CategoryID=1&p=1.2