OfflineI am curious about what process should be used if one is starting off in this business. If u send people to your website then it seems to me that you have to have a business name and a physical address. Can someone fill me in on this? I don't hear many people speak on this subject. For instance, if I were sending post cards to people in pre foreclosure stage it would seem as though a business name not my name would be better along with a physical address. Someone please explain this to me. Thank you
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This is a very good question which can be answered by most of you since everyone is in the same field. I'm sure everybody has established their businesses differently. It would be great if we can hear why they have built their businesses with the current entity. There's gotta be pro's and con's for each type of business entity in this field.
I bought my first investment property in my own personal name when I got started. Then later on I got a business name LLC. I got an LLC because I'm the sole proprietor and I don't have any partners. That was the best choice for me. You have to read about the setting up an LLC or Corporation to choose what's right for you.
I think if you're going to advertise with a website you should get serious and get a business name and entity set up, a business phone number, and an address, a domain name and email address. It's possible to use a home address or you can get a "street" address with a UPS Store mail box. Try not to get an actual PO box because as you grow, people want to see a street address. You can you use a cell phone or sign up for one of those VOIP services that are pretty cheap. I use Kall8, but I've hear google voice is pretty good, too. There are lots of companies and choices.
If you're starting off wholesaling, it may not be quite so important to have the company name because you're not taking the property in your name, you're assigning it. The whole purpose of an entity is to keep the liability in the company name and protect your personal assets. I wouldn't want a rental property in my personal name.
The most important reason for having a business entity is "asset protection". Doing your deals under your business entity protects you and your personal assets. Also, you have tax advantages that will save you a lot of money.
There are advantages and disadvantages to different types of entities. Talk to your CPA and/or a tax attorney for advice. They'll be able to look at your financial situation and steer you in the right direction. What ever you decide will affect how you file your taxes - get some good advice.
Good luck!
Karen
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From what I gather I see that once I flip my first property then I should consider getting a LLC. That's fine. What I want to know is if many of us choose to assign the property to a cash buyer, do we need to put up earnest money since we won't take possession of the property? Thanks for your responses