Best Legal Entity for Real Estate Investing

best_legal-entity-for-real-estate-investingWhat is the best legal entity for real estate investing? In the following video, you’re going to discover what a legal entity is, why understanding legal entities is important for real estate investors, the different types of entities for real estate investing as well as what the best one is for most people. DISCLAIMER: The following is NOT legal advice. Before making any decisions on legal entity structure, consult a qualified attorney as well as as accountant.

One big disclaimer:

I am NOT giving you legal advice in this video. Nor am I giving you accounting advice either. I am going to recommend prior to you setting up anything, that you speak with a qualified attorney as well as accountant, to make the best decision on if and when and what type of entities you need to create if you’re going to be real estate investing.

 

LLC

 

Since I’m not an attorney and not an accountant, I’m probably going to tell you stuff they wouldn’t tell you. What I’m going to share with you comes from the school of hard knocks. Comes from a lot of years of making good and bad decisions, and this is the kind of stuff that I didn’t read in books. In fact, in this training here im going to probably contradict some things you may have read in some other famous books, because it is interesting what happens in the real world with this stuff. Let me put myself in your shoes for a moment. Maybe you’re first getting started or you’re contemplating becoming a real estate investor. Maybe you’re trying to consider what you need to do as far as an LLC. You need to set one up? When do you set it up? Do you even set up an LLC? What is an LLC? Do you set up a corporation? I’m going to try to answer some of those questions pretty briefly, and then I’m going to get into more of what it means to be a real estate investor.

 

Sole Proprietorship

 

Okay, the first thing, I think this is extremely important, is that in business, if you do not set up an entity and you start doing business, you are by default a sole proprietor. A sole proprietorship, that can do wonders, right? This is your default. If you’re doing business, any kind of business, real estate investing or otherwise, you’re automatically a sole proprietorship. That’s just the way the law works. When I was living out of my truck and I was flat broke and homeless, my first few real estate deals, I did them as a sole proprietorship.

 

Liability Protection

 

Now most attorneys and accountants, they freak out and they gasp when you mention the idea of doing business in a sole proprietorship, because of one main missing element. What you’re missing from a sole proprietorship, is what they call liability protection, okay. Liability protection. Let me break that down for a second. It’s not that scary to understand the concept. The concept is this. If you do something in business and you’re operating as a sole proprietorship, you could have a business name, you could name your business Successful Investments, but if you don’t have a legal entity set up, you’re still operating as a sole proprietorship. If something goes wrong, somebody sues you, something happens, they can sue you personally and take all of your personal assets along with whatever happened in the business.

 

What Kind of Entity Do You Choose?

 

Now, when I first got started, I was homeless, broke, whatever. I didn’t have anything to lose, so you know, I mean if somebody sued me, what were they going to get? Nothing, right? When you’re first contemplating this, if you are absolutely flat broke and have nothing at all, just keep in mind that yes, it’s still important to consider getting a legal entity set up, yes, but it’s not the end of the world because you don’t have a bunch of things to protect. However, what if you already have a pretty significant set of assets and you’re looking to get into real estate investing? Let’s talk about the different kinds of entities and what can happen.

 

Sole Proprietor with Liability Insurance

 

Well here’s the first thing. What some investors do is they continue to operate in a sole proprietorship. Let me explain. What they do, is they get liability insurance, okay. They would talk to an insurance broker and they would get an insurance policy that protects them up to say, two million or three million. They get a liability protection policy and they continue operating a sole proprietorship. Why? Why would any real estate investor in their right mind operate like this? Interestingly enough, in most cases, you actually do better from a tax perspective if you operate out of a sole proprietorship. I bet you didn’t know that. You file your expenses under Schedule C. Any accounting people would know what I mean by that.

 

Example

There’s a gentleman, I know that he owns over 350 single family home rentals. He owns them all free and clear. There are a lot of them are junkers in the ghetto, but he owns all of them in a sole proprietorship.

 

Why?

 

In his state if he owns real estate in a sole proprietorship, he doesn’t have to pay a state excise tax. However, if he owned that real estate in an LLC or a corporation, he would have to pay an excise tax. Does that make sense? Certain taxes can get triggered on a state level. Not a federal level, but a state level, if you own real estate in certain entities. That’s one of them, is LLCs or corporations. This particular gentleman owns all those properties with sole proprietorship, and he protects himself in the case of a tenant trying to file a lawsuit against him with a liability insurance policy.

 

Canada

 

Some of you may be watching this, you may be from Canada. Many Canadian real estate investors do the same thing. That’s because when it comes to Canadian legal entities, in most cases if you want to set up a corporation you have to have five employees. Well shoot, most real estate investors never get to employ five employees. You don’t need employees really. This is a great option. Also, I know of people that do a lot of short sales, where they buy short sales. These days when you make an offer on a short sale, banks want to see a personal name. A lot of them make offers in their own personal name and they’re operating as a sole proprietorship and they have a liability insurance policy. That make sense? All right.

What I gave you here that wisdom, you’ll hear nowhere else, but it’s true and it’s very accurate. It can be an easy way to get started. You don’t have to set up an entity. The only thing though is liability insurance policies aren’t always cheap. In some cases it’s actually cheaper to go with a legal entity. That’s the first one. By default, if you’re operating a business, you’re already a sole proprietorship.

 

LLC

 

The next thing I want to mention is something called an LLC. That is a limited liability company. Limited liability company. This is what is used most often for most small businesses. Most small businesses are set up with an LLC. It’s because they’re flexible. They’re a lot easier to set up, there’s a lot less minutiae that has to be dealt with as far as corporate paperwork and those sorts of things. They can be filed easily, set up, I mean it’s just ease of use, okay. Now the cool thing about an LLC is that it can be taxed as a sole proprietorship or it can be taxed as an S Corporation. I’m going to say Sole P or an S-Corp. I have LLCs that are taxed as sole proprietorships, and I have taxed as S Corporations. That can be nice when it comes to eliminating self-employment tax.

One of the problems with operating as a sole proprietorship or as your LLC being taxed as a sole proprietorship, is self-employment tax which can get expensive once you start making a lot of money. That’s when we go back to what I said at the beginning of the video, and that is before you set anything up, I want to recommend you talk to both an attorney and an accountant, because they may have competing views. The attorney is going to talk and focus on liability protection, and the accountant’s going to focus on how to save you most in taxes. If you can set up an LLC taxed as an S Corporation, that can be pretty sweet, although if you’re not making much money at all it’s not helpful. There’s a balance there.

 

S Corporation

 

For most cases, you’ll probably be setting up an LLC. If you want it to be taxed as an S Corporation you can do that. The final thing is certainly some people set up what’s called a corporation. I’m going to call an S Corporation. You’re probably never going to be big enough to set up a real corporation, those big big big things. Those are a lot more expensive, they get taxed at the corporate level, whereas S-Corp, the tax still flows back down. This right here you may use this as well. Again, your accountant or your attorney may bring this up as an option. I still vote that you go with the LLC, S-Corp, but again I’m not giving you legal advice or accounting advice.

 

Tip

 

I’m going to give you an incredibly important tip here. Okay. Real estate investing can be broken up into two activities. Active and passive.

Active is you buy a property, fix it up, resell it. You talk to motivate sellers and flip properties, you’re wholesaling, you’re moving and grooving, you’re doing deals.

Then the passive side is where you buy a property and lease it out and you get rental income. That’s your passive income. This is the rule of rule of rules. Okay, here’s the rule. I’m going to put it in red it’s so important. Okay, this is it. You want to separate those two activities. Separate passive and active. The reason why is for tax purposes.

 

Rental Property

 

It is potentially possible that if you own rental property in the same entity, which could have been your sole proprietorship if you were doing it in your own personal name. If you’re both flipping properties and owning long term rentals in the same entity, then what can happen is the IRS can say that all of your rental income is going to be taxed at the ordinary income level, which is a nightmare. Rental income can be taxed a lot less because it’s rental income, or passive income. You separate the two. Any time you own a rental property, put that into a legal entity that is separate from what you’re doing with your active stuff.

 

Keep Things Separate

 

Maybe you’re doing your active stuff in your sole proprietorship, but then you set up an LLC for your rental income, or vice versa. Maybe you set up an LLC for all of your flipping and wholesaling, and then you do all of your rental income out of your sole proprietorship with your liability insurance. Maybe you do all of your activity out of the S Corporation. This is all your active stuff and then all your long term stuff is out of your LLC. You got to separate the two. Does that make sense? Huge huge huge detail. If you don’t separate the two you’re going to really get hit on taxes.

 

Which State you Should Set Your LLC in

 

All right, this right here really encompasses the majority of this whole concept. I think another question a lot of people bring up, is where to set this thing up. Do you set it up in your own state? Do you set it up in some wonderful state halfway across the country? I’ll say this: In most cases you’re better off putting it in your own state, because that’s where you’re going to be operating your business. Now, some people like to set up their LLCs in Wyoming. That seems to be the favorite state these days, because of the non-disclosures and some other things that you can do. You can go through all those headaches and hassles, and again, talk to an attorney about that, but in most cases it’s probably a lot simpler to set it up in your own state.

 

Wyoming

 

One thing to keep in mind is especially when you do a lot of active investing, it’s not always a good idea to set up your entity in Wyoming if you’re doing business in say, Texas. When you’re working with sellers and they try to look you up and they hire an attorney maybe to look you up, and they see that you’re not even in business in Texas, then all of a sudden you’re in a bigger heap of trouble and you need to have filed some documents to be able to do business in Texas.

 

My vote is just set up the entity in your own state, and make sure you talk to a local accountant, local attorney to make sure you set it up correctly.

 

I know in Tennessee, when I owned a bunch a real property up there, what I did was I set up an LLC, and the two … Excuse me. I set up a partnership, and the two partners were LLCs, and that’s how I avoided paying the excise tax in Tennessee. There’s some cool creative things you can do there as well.

Also keep this in mind. The simpler the better. The more entities, the more you have to pay each year for the annual fees and all sorts of things. I get the question sometimes, “Phil, how many rental properties should I put into an entity before I set up a new one?” Well I got this point to make. Once you start bringing in some real rental income from rental properties, you’ll be able to answer that question yourself. Do you put five into one LLC? Do you put one property per LLC? My vote is actually, depending on which state you’re in, move the property into a land trust with a different name, and then that way you can throw them all into the same LLC.

 

Assets

 

When anytime somebody was trying to search to see how many assets you had and they were going through the county records, they wouldn’t be able to figure out what you own, because every single property is owned in a different name, of a trust. That’s going into a different realm there as you can see. There’s ways to get around it. I think you should keep it simple with your entities, because you’re going to be filing tax returns on each one which does cost money. All these things are going to be expensive if you keep piling up too much complication. Does that make sense? At the very very least, if you’re going both own rental property and be flipping, make sure you have two entities. That way you can avoid your rental property income being taxed as ordinary income.

 

 Best Legal Entity For Real Estate Investing

 

Obviously it depends. It depends on what state you’re in, it depends on what your situation is and how much money you’re actually going to be making in that thing. In most cases, for most real estate investors, you can set up an LLC. That’s so easy to go and set up. By the way, as it relates to paying people to set up your entities, you want to talk to the attorneys and the accountants to get the information on which entity to set up. The actual physical setting up, sure you can hire somebody. They’re going to charge you 300, 500, 900 bucks. I have set up so many entities over the years.

 

Setting Up Entities

 

  • You can just go online.
  • You can just go to the Secretary of State.
  • I’m not giving you legal advice here, but you can and you can just set this thing up, pay the filing fee and be done with it.

There’s only like three check boxes and a couple of fill in the blanks. I mean it is so simple to set these things up. You get an EIN number from the irs.gov website. That takes you all of three minutes. Setting up entities is so simple. Knowing which entities to set up and use, that’s the part where you need these professionals, because they know all the different angles,  Well, I hope this helps on understanding which legal entities to set up.

 

Getting Started

 

If you’re first getting started, you may just go with the sole proprietorship and get you some liability insurance, or you may set up your first LLC. Then you can always start as being taxed as a sole proprietorship and then change it to be taxed as an S-Corp later if you don’t know which one to elect. Just get started and try something.

 

Big Problem

 

If you’re a traditional real estate investor, which we don’t talk about that much in my videos, but you might be one of those. You have a very very big problem if you’re going to a bank to get a mortgage. Banks are going to give you a mortgage, but they’re going to expect you to own the property in your personal name. If your name is the one that’s on the loan, they want that to match what’s on the Deed. They won’t even let you own the property in an LLC, they’ll make you own it in your personal name. This happens all the time, and it drives real estate investors nuts. They’re, “What? I want to be in business in an LLC,” then they say, “What I’ll do is, after I buy it, I’ll deed it into my LLC, and now it’ll be in my …” Well you can that, but then you’ve just breached the Deed of Trust, the clause in there that talks about not being able to change title.

 

Traditional Investor

 

Not that the bank may do anything about it, but I think the bigger lesson here is this. If you’re going to be a traditional real estate investor and you’re going to be using normal bank loans and they’re going to expect you to become the owner, well then just put everything in your personal name, get liability insurance, and then do all your flipping and stuff out of an LLC, or, become a creative real estate investor whereby, since no banks are necessarily involved, you can move anything into an LLC, which is what I’ve always done. I’ve never gotten a bank loan to buy a rental property in my entire business career. I just always move mine to an LLC and I take it over subject to. I do owner financing. I become the owner, but I can own it in an LLC right there. I don’t have to do any trickery, I don’t have to worry about owning it in the sole proprietorship.

 

Comments

  1. Mary Stead says

    Wow, this was great, the best I have heard. Thank you very much.
    I live in IL and it costs $600 for an LLC. At present, I have not been
    able to do any deals so I am using a sole proprietor. When I start
    actually wholesaling or doing lease options, I will do an LLC.
    I am going to check the liability insurance now. Thank you again.
    Excellent information as always.

    • Mary, a Wyoming Corp or LLC can own property, as an investment, in any State. The State Fee is only $100; the Registered Agent I use charges $50 for filing for you, $100 for the 1st year of being your Agent and $50 per year thereafter. She works in the Wy Secretary of State’s office, so she just walks down the hall to file. And Wy is one of the most business friendly States in the US! This is the best deal I’ve run across in the whole country, in over 25 years of setting up C Corps, LLCs and Business Trusts for myself and other folks. I hope he isn’t selling the a Filing Service, or you’ll never see this, LOL! I haven’t watched the video yet… Her name and contact info are as follows: Candice Dillman, 1 Accurate Agent, 1903 Rayor Av, Cheyenne, Wy 82001

      • Phil Pustejovsky says

        No, I am not selling a filing service. In fact, as my video described, most states allow the filing to be done online without the need to pay an attorney, accountant or even an entity filing service. Further, in the video, I describe why most people should set up their entities in their home states as opposed to far off lands like Wyoming. BUT, always consult an attorney and accountant before making any final decisions. And finally, you have to be very careful when it comes to choosing a Registered Agent if you are going to set up an entity in Wyoming. In some cases, these registered agents can be fly by night shops that close their doors and you never know. Then, unbeknownst to you, important details are not being reported to you. So just be aware that choosing a registered agent based solely on price should not be your only deciding factor.

        • Phil, as I said, I hadn’t looked at your video yet. Everything you just stated as factual, in your reply to my reply, is absolutely correct. What you say about fly by night operators in Wyoming, and in other States, too, is also fact – not just opinion. That is, in part, why I didn’t just recommend the State but recommended a particular Agent, one I’ve done business with. She’s been in business for a number of years, does it as a part time thing while her full time job is actually within the Wyoming Government Agency that regulates that business.
          As to local vs outside an investors home market – it depends on the home market’s State. I have another company, an LLC involved in non-RE. One of my partners in that business lives in Florida. Like Wyoming, Florida is a no State Tax State, and with him living there we don’t need a Resident Agent – so he filed. I live in Maryland – one of the most business UNfriendly States in the country! I will NEVER open an LLC here unless I will be operating in Maryland in a business where a C Corporation or LLC in another State would have to register with Maryland as a Foreign Corporation – and even then only if there was some more compelling reason than the extra annual cost.
          In an RE Investment business, where one has an INVESTMENT in a local market but are not operating in that State other than in operating your investment, it is my opinion that a local or foreign (other State based) LLC is NOT a critical factor. Difference in set up and annual costs, State Tax laws, local Securities laws impact on raising money using your LLC, degree of business friendliness of the local State in question compared to the foreign State, THESE are the issues I look at.
          With that said, LLCs are ALWAYS a good choice. They provide the same liability protection, as long as you don’t break any laws, as a C Corporation would. They are simpler to understand, and to operate. They are not expensive to set up and operate. They were created to make it easier for small businesses to raise money than was the case before they existed.
          While all of this is opinion, it is INFORMED opinion. I set up my 1st LLC, to fund an Oil & Gas drilling deal where I needed more money than I had by myself, over 20 years ago, back when only 4 States even allowed LLCS. One important thing, that may not be covered in your video – (I still haven”t had a chance to look at it, LOL! From the reviews and your response, I expect to endorse it when I do) – if a person is going to use an LLC, they DO need to know that having a 2 Member LLC instead of a 1 Member one is now often a good idea because the IRS is sometimes being their obstructionist selves regarding 1 Member ones, challenging them as being a disguised Sole Proprietorship or an attempt to create false write offs. If they succeed, this reduces the tax write offs one can legitimately use, letting the IRS get their pound of flesh.
          I think it important to note, too, that NOLA Press publishes a very good guide on how to create and operate an LLC. Sorry, I don’t remember the title – I loaned my old, beat up copy last week to one of my RE investors, and don’t have it handy.

          • Carlos & Phil
            I just set up an LLC for my investing yesterday. I have a friend whom is an attorney and he didn’t charge me to set it up. While setting it up I mentioned to him that I remember hearing that it is better to set it up as two person LLC but could not recall why. His points were that with a two person LLC I would have to share my profit and only be able to get half of the deductions and would have to file 2 tax returns and he could not see any benefits to a 2 person LLC as to a 1 person LLC. Who should I have as the 2nd person if I do set up another LLC and decide to don it as a 2 person LLC.

          • Phil Pustejovsky says

            I didn’t recommend you create complication by setting up a multi-member LLC (when you are only one person). That would have come from somewhere else. There is a slight advantage in case of catastrophic issues with a major lawsuit whereby a multi-member can do some things a single member can’t, but that advantage only applies in certain states. In other words, keep it simple.

        • Finally watched the video! Phil, my heartfelt congratulations! I have never seen a better presentation for the beginner. Never. Also, it is EXTREMELY rare for me to see one of these “instructional” pieces without my being able to tear them apart. I found NO, ZERO, errors in yours. And your opinions are expressed clearly AS opinions, with legitimate rationals.

          You even presented one piece of info I didn’t know. I haven’t checked it out yet, but as everything else was correct I anticipate it having been accurate, too… And it will sometimes change how I structure a deal, LOL! And I’ve been doing deals almost 3 times as long as you have!

          Note: I have no affiliation with Phil, other than now being a fan.

  2. Charles Town says

    Great Video..That’s just what I have been wanting to know .

  3. This information was so helpful….I am ready to start my LLC after speaking with a Lawyer and an Accountant….Super, Super excited!!! Love the informative videos….Thank You Phil

  4. Charles Steele says

    Thank You so much!!…what a great, personable and informative video….specially for us “aspiring “rookies”…I’m very grateful for you Phil.

  5. Do you know what LLC would be best for a person on Disability?

    Have you heard anything about a New Mexico LLC or a Delaware LLC

    Thanks

    Mr. Lee

  6. Greg Carrier says

    Great video (as are the others I have watched from you). Do you have an opinion on at what point does holding and managing rental properties becomes active income rather than passive. The same with flipping. I get different opinions on whether a flip is a capital gain and that due to having several rentals, I am now running a business and all of the income is active, not passive. Thanks

    • Phil Pustejovsky says

      Short term capital gains are taxed the same as ordinary income. Now with the Affordable Care Act adds almost 4% tax on investment income once you are above $250,000 (married couple) so you’re danged if you do, danged if you don’t. So if the income was considered ordinary income, you’ll be paying either self employment or if you pay yourself with a salary, you get hit with medicare, etc. So no matter which way you, ordinary income or short term capital gains, the taxes end up being about the same.
      Check with your CPA but all your rental income should be considered passive income if you set it up right.
      Long terms capital gains are when you own the asset for a year or more.

      • Phil,
        In a sole proprietorship the property. Liability insurance is not enough to provide enough protection in case of a law suit or a separate policy is needed with higher coverage limits?

  7. Phil,

    Awesome stuff, normally I don’t reply to anything but I had to given the fact you just gave us all some real world awesome training. I am new to REI and I am in the final phases of closing on my first duplex. I was scared to death as a newbie, but I just to action realizing there are no failures only outcomes. I am interested in wholesaling although again I am a beginner with no experience and passive income investments so your advice on keeping both separate hit home for me. I already have my LLC so I will just wholesale and flip out of that and lease as a sole proprietor with liability insurance. Also, when you wholesale or flip do you immediately take all your profit and buy a rental out right or should I just do the 10 percent down with a 15 year mortgage? Thanks again your awesome!

    Machion

    • Phil Pustejovsky says

      Your question depends on a number of factors. In general, the best way to build wealth is to plow as much of your profits back into your fledgling business. Hopefully that general rule will help you make a wise decision.

  8. Dianna Williams says

    Phil,
    Thank you for the great video! Very informative for a beginner REI like myself. I have yet to get my first deal, but the question of how to set up my company is one thing I can now tackle because I have gotten good information to lead me to the persons who can assist me as well. Thanks again.

  9. Great video Phil! I got more out of your video than I did talking with an attorney or some other realestate proffesionals. Good Job! Aloha Dale!

  10. Hi: Phil my heartfelt congratulations! great videos.
    On 2008 I created a California S-Corporation to be used in a Real Estate Venture, however it never happen, and the entity never was used, therefore I ask my accountant then, to dismiss it. I am 71 years old and for the last four years I was in and out the country. When I came back this last time my new accountant send the following e-mail:

    OK…Hope all is going well for you.
    They said no returns have ever been filed so here goes:
    2008-2013 need to be filed
    You are owing with the $800 franchise fee
    2008 Zero…first year free
    2009 $1,200.33
    2010 $1,148.94
    2011 $1,106.41
    2012 $1,069.74
    2013 $ 1,037.21

    Yikes…..Let me know what you want to do and have a great weekend
    Diane Herman, EA CTC

    She told me that the Franchise Tax Board will not dismiss it until the above mentioned amount is paid in full. I know it is not your field of expertise, however you or any of your associate may give a suggestion how I can resolve this problem. Thanks for your attention to this matter. Truly yours German

    • Phil Pustejovsky says

      Sounds like you need to speak with another accountant who may have some ideas on how to get around this. Next time, make sure you verify anything you hire an accountant or attorney to do. If they say they have dissolved an entity, follow up to make sure it has happened.

  11. Transaction Funds…How can you use the Transactional funds if you have a buyer that will buy the property 10 or 20 thousands more and title does not pass you by name?
    should you not be a real estate agent to sell the property from one person to another?

    • Phil Pustejovsky says

      If you are going to use transactional funding, title would pass to you and then you to the new buyer. If you want to avoid transactional funding, that gets complicated but can be done in many situations.

  12. Mr. Oliver says

    Thanks. Who is the best entity/person to be my mortgage person?

  13. Ron Stewart says

    Always excellent and useful information. I really appreciate your sharing. I watch all of your videos that I come across and I have learned so much from you. Keep it coming Phil and GOD BLESS You.

  14. Phil, this week I set up my LLC in preparation for my investing. I have also looked into the solo 401k, that will be next. My question to you is the following.

    I got a call from a Dun and Bradstreet representative that suggested that I keep my personal credit and the LLC credit separate. I believe he was going to try to sell me on some service. But he never got to that point openly.

    The gist of it all was that he was suggesting I immediately set up a credit profile with them which entails them issuing a number like a social security number but for the business. That way when I need to solicit a loan I would give that number and the banker or person would get a full report of the companies credit worthiness.

    Although this sounds good and looks good, I don’t think I am even at the stage for it. Obviously this can’t hurt, but is it worth while? Do you have anything like this for yourself? Thanks

    • Phil Pustejovsky says

      That was a sales call. If you really needed it, you would have signed up for their service and you would have been expecting their call. Getting your LLC’s credit established is helpful but you best do that by getting a credit card for your LLC when you set up your business bank account.

  15. Why would you have a legal entity for your real estate investing. It’s not like any employees are needed to invest in real estate. By having a legal entity for real estate investing increase the amount of taxes a person will need to pay. I never invested in real estate.

  16. anonymous says

    Wouldn’t setting up a business entity with no employees increase the amount of taxes you’ll have to pay.

  17. Hi Phil,
    In this latest video, you suggested you have never used banks to borrow money for realestate deals.
    Phil, please can I ask, where / how do you borrow money from if not the traditional banks?

    I am from Australia if this makes any difference?

    Best regards
    Brenden

  18. anonymous says

    Please Explain. I apologize if these questions bother you. I never owned a business before.

  19. Phil should there be a distinction between dealer and buy and hold when speaking of a sole proprietorship. Sole proprietorship dealer would file on Schedule C subject SE tax but buy and hold would be filed on Schedule E no SE tax.
    Also with sole proprietorship intent may get your around SE tax for a dealer.

  20. Patrice Drewes says

    I own 2 rental properties in a sole proprietorship, and I also have an LLC. The properties, however, are not in the LLC. How do I put them into my LLC?

  21. Phil, I would still like to know the fine points of how you got started. At 54 I find myself unemployed, broke and almost homeless. Any insight you can give would be greatly appreciated.

  22. Great video. There are so much helpful information.
    Phil, do you recommend to also have an umbrella insurance in addition to the liability insurance policy?

    Many thanks.
    J

  23. Gary Wyatt says

    Hey Phil, I am sorry I am just now getting to see this. Wow, what awesome information. Very helpful. I heard you say you have an apprenticeship program. Do you still do this? My wife and I are just getting into real estate, and are so excited to get a few rehabs and rental properties (active and passive) under out belt.

    Would you be interested in helping us out? It would be great to work with you in your program.

    Regards,

    Gary and Jennifer

  24. Hugo Carrillo says

    Just need to thank you for the simple and unselfish way you share your knowledge with all of us starting in this adventure…i really appreciate your time. I hope to meet you one day and shake your hand and share stories. Good and bad … God bless

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