Thread: Business of Owning Real Estate through an Entity Question

Hi Guys,

I wasn't sure where to post this since it's heavy with business and real estate. But after some thought, I don't subscribe to a business forum, so I don't have much of a choice.

Background:
Corporations are considered as separate entities in which business is conducted though. Depending on the corporation type and size, it can apply for loans, make investments, sell equity (shares), employ individuals, and of course, conduct business. It could even have a qualitative and quantitative level of credibility.

As far as the business aspects, this can even be the business of owning real estate. Such that, the corporation would purchase property, ie commercial tower, and have it's customers ie. tenants, pay rent. This rent can then be considered as income, and as long as the mortgage, expenses, etc. is less than the total rent, we will have a self sustaining business. Of course, the greater the net income, the better. =)

Question:
Is this a common activity in real estate? What's stopping individuals from establishing a corporation, investing their money ("buying" equity/shares), applying for Real Estate loans, and then purchasing income property? Besides the pro's and con's of corporation ownership vs. individual ownership, wouldn't this be an excellent idea? From my understanding, which is limited, corporations have better appeal to raise capital, whether through the sale of equity, or applying for loans.

Imagine you found the perfect rental property. Let's say it's so "perfect" that all you have to put in is a few thousand dollars, a bunch of sweat equity, and you'll have an income property with positive cashflow, even after all expenses and debt service.

This is my situation. If I've missed critical background information or details, let me know and I'll do my best to respond. Also, let me know if this is the wrong subforum to post this at, I'll have this moved.

Thanks again,
K