{"id":121983,"date":"2020-02-15T14:30:07","date_gmt":"2020-02-15T21:30:07","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=121983"},"modified":"2021-03-16T14:58:32","modified_gmt":"2021-03-16T20:58:32","slug":"an-online-resource-real-estate-investors-should-know","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/an-online-resource-real-estate-investors-should-know","title":{"rendered":"An Invaluable Website Every Real Estate Investor Should Know About"},"content":{"rendered":"

It\u2019s time to get serious about your real estate business. If you want to grow as an investor, you will need to structure your business in a way that saves you money, protects you from lawsuits, and fits your goals.<\/p>\n

There are more than a few options for structuring your business. You may choose to go into a partnership with others or establish your business in another state. Luckily, there are plenty of resources that can help you make informed decisions and build something that is profitable, protected, and personally fulfilling.<\/p>\n

One of the best resources is the Small Business Administration<\/a>. Use their resources, along with the resources of business planning and legal professionals, to choose the best structure for your real estate business.<\/p>\n

What Does the SBA Do?<\/h2>\n

The SBA is a federal agency dedicated to helping small businesses grow throughout the United States of America. If you are starting a real estate business, you will get to know the Small Business Administration (SBA) very well.\u00a0In general, a business is considered \u201csmall\u201d if its net worth is under $7 million and net profits, after taxes, are under $2.5 million.<\/p>\n

The SBA provides counseling, resources, and even funding to small business owners. Even if you have been a real estate investor for some time, keep the SBA\u2019s website bookmarked on your computer.<\/p>\n

Financing Options From the SBA<\/h3>\n

The Small Business Administration doesn\u2019t just offer helpful advice. They can also offer loans to help real estate investors purchase commercial real estate<\/a>. SBA loans offer longer terms and more competitive rates that are normally reserved to businesses with more resources.<\/p>\n

These loans, including the SBA 504 loan and 7(a) loan, do have limitations. Investors can only use these loans to buy or repair owner-occupied real estate. Only 40 percent of the commercial property purchased with these loans can be rented out to tenants. If you meet these requirements, consider applying for one of these loans.<\/p>\n

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How to Choose the Right Business Structure for Your Real Estate Business<\/h2>\n

It\u2019s possible to get a loan<\/a> for a piece of real estate, buy it, and do as you wish without setting up an LLC<\/a> or S-corp. But this may not work out well in the long run. Unless you have an asset protection strategy, your properties will be left vulnerable to lawsuits. Most asset protection strategies involve setting up a business that limits your personal liability.<\/p>\n

Related: <\/em><\/strong>Landlords, Legal Liability, and LLCs: How Property Owners Cover Their Assets<\/a><\/em><\/p>\n

Real estate investors should also consider taxes and ownership when choosing a business structure. Some business owners must only file a personal tax return and pay self-employment taxes. Other owners pay taxes as a salaried employee of their own business and <\/i>pay taxes on the profits made by the business.<\/p>\n

If you are not sure which option works best for your business, reach out to a legal services provider or CPA.<\/p>\n

Different Options for Structuring Your Business<\/h2>\n

The SBA has laid out different business structures that are available for your real estate investing business. Once you have chosen a business structure, it\u2019s time to register your business, get tax numbers, and start operating under that structure.<\/p>\n

The different structures for real estate businesses include:<\/p>\n