New LLC (or entity) for motivated seller website?

Question

While I don't want to be over-complicating things, I did want to make sure that I was doing the right thing (so I don't get dinged by the IRS, or worse... a LAWSUIT).

My company, as you can see below, is Capitol Wealth Builders, LLC. I market this company to other investors that are looking to wholesale deals, as well as use this company when buying properties to rehab.

I recently signed up for Lead Propeller where they give you 3 websites. I've set up one website as my "buying" website. That website I've got the domain www.SellHomeNowDMV.com, where I'm looking for motivated sellers in the DMV (DC/MD/VA) region. My other website is for wholesaling and listing properties I'm rehabbing. While I don't have any active deals right now, my domain here  is my company name: www.capitolwealthbuilders.com

My predicament is this... I don't have "SellHomeNowDMV" protected by an entity, but not sure I do. Thoughts? Secondly, I'm trying to avoid marketing to these motivated sellers as a "hoity toity" real estate investment firm called "Capitol Wealth Builders" when I'm trying to buy their property for steep discounts, and felt "SellHomeNowDMV" could just be a domain I own and do business as when marketing to these folks (postcards, craigslist, yellow letters, etc.).

For your savvy investors out there... Do I need to protect this website and this phrase that I'm doing business as, or can I leave it alone and when I enter into a purchase agreement with the property owner, list my business as "Capitol Wealth Builders, LLC" there?

I realize that maybe these are questions for a lawyer, but just based on your experiences, what have some of your learned?

Curt Smith · Answer

Start doing deals first. Don't wast your focus on entities!!! After you have a reliable deal flow then worry about mainly tax advantages wholesaling or flipping in the name of an LLC taxed as an S corp to leverage additional expenses you can deduct inspite of paying out half of your profits as W2 paying FICA etc. You can make up for the higher tax paid with much higher deductions. But to undersand how to do this you need to be down the road a few years and have expenses in excess of some amount as a percent of your income.

Near term do everything in your name and don't expect to deduct milage driving to potential deals, that is on your own dime.

Account Closed · Answer

Hi Scott,

Here is my "OPINION" - I am not an atty... [Although my partner is one of the best in the US. He's retained by title companies to clean up "cloudy" title work so the close can happen. ]

Do everything as an "entity" and not personally. I have started over 30 LLCs during recent years as a business owner and property owner. [Actually it is all about control, as you may know, and not really ownership. I know a business associate that owns over 200 Cell Phone stores -- each is a separate LLC. You can roll all of them up into a single corp ownership.]

There are services out there that are very affordable. Yet, I always set up my entities:

1) I prefer to use Indiana online with the Secretary of State's office -- easy.

2) Obtain an TIN from IRS.GOV for each entity.

3) Then roll forward with a nice Operating Agreement and Bank Acct Resolution.

You can do that in other states, too. (It depends.)

Ricardo Rosales · Answer

My advice is not to get complicated and confused with all the legal entities, like @Curt Smith said on his post get some deals going and make those deals pay for the legal structure, too many people worry about the gold before digging for it, so get going and when you get some properties go ahead and set up your legal entities.

John Ma · Answer

hey scott,

I can't give you the best legal advice, but it would make sense to have separate entities would it not?  From my exp,  at some point, investors have separate entities for marketing the properties, selling the properties, and rehabbing.

On that note, I noticed you live a few blocks from me.  Lets connect. I am looking for projects in the area.

Dan Acampora · Answer

you may want to create an LLC or Corp for your "marketing" and be sure to include a "legal" section or link on your sites that defines the terms of use and disclaimers as needed but as Rick has stated, using your personal name would generally be considered a no-no.I am NOT an attorney, so it's always good to check with one in the state you operate in."That's my opinion, I could be wrong" - Dennis Miller

New LLC (or entity) for motivated seller website?

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