Sole proprietorship for wholesaling?

Question

Hello everyone,

My question is ... Can I start out wholesaling without creating a business entity?  I just canceled my order with Legal Zoom for a DBA after finding out that I couldn't do business out of my county (Orange County, CA).  I was pretty surprised that that was the case.  I primarily want to virtually wholesale out of my home state.  I'm not ready for an LLC, not to mention that it costs $800 plus in CA.  If I must create a business entity, then perhaps a sole proprietorship would be best?  What is the best way to set one up to ensure that I can do business across state lines?

Thank you!

Carlos Altamirano · Answer

Hello @Stephanie Howard

You don't need any entity to start wholesaling! Lets get some deals going, once we are making tons of money THEN we can start creating an entity for the business (get some legal counsel). Having said that, virtual wholesaling is great! As a matter of fact, MOST of my wholesale deals are virtual in east coast states while residing in CA. Good luck!

Kyle Ransom · Answer

It is a personal choice as to how you want to start your business I think. Me personally I always set up a LLC before conducting any business especially real estate. The reason being if you should a deal go bad and someone decides to sue you, if you have a business they can't go after your personal assets. As a sole proprietorship everything you own is at risk.

Kyle Ransom · Answer

you are welcome

Stephanie Howard · Answer

thank you @Pratik P.

thank you @Kyle Ransom

Pratik P. · Answer

Don't worry about a business entity when you're just starting out. Your top priority is to make the phone ring with motivated sellers. Once you have some steady income coming in, you could set up an LLC or S-Corp and get some tax benefits. For now, you'll be a sole prop. or schedule C on your tax return.

Sole proprietorship for wholesaling?

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