Rental Business: Joint Venture (JV) Question – Register new Corporation for new JV OR use your existing Corp.?
Assuming you already have a registered corporation holding properties of which you have 100% of the shares, how would you purchase an apartment building (say 10-plex) as part of a new, first Joint venture deal:
– Register new Corp. for the JV partners, and purchase under this new corp. OR
– Use your existing Corp. and just add 50% of JV property to it every time you purchase as part of a JV
(and the other investor can do the same – register a corp. and put 50% of the property there. but who is on title in this case? can to corporations be shown on title?) OR
– Put the property in a registered Trust if only one of the partners is on title (the trustee), for example (not sure about this option how it works)
I heard about a rule of thumb saying you should register a new Corporation every 5 properties. In other words not to purchase more than 5 properties under the same corporation. not sure about JV rule/recommendation with regards to registering a new corp.(?) Also, not sure if it is really supposed to protect you much more
not putting everything in one corp. I’ll have to discuss this with my lawyer too, however it is always great to hear other investors’ point of view first.