Hi I have read soo many inspirational posts that gave me the push to stop bring scared and listening to others. I decided hey let me get started. Rentals was the first thing that caught my eye. I started a LLC for long term rental properties. Now I have run into so many obstacles which i expected some but not as many as i thought. I was hoping to build my business credit to get a lender. But was denied a secure business card with Wells Fargo. I was informed i would need at least 10k to start which i do not have. Someone brought to my attention wholesaling. Im concerned about my LLC. Can i still use my llc even though it's for rental properties? What would i need to do? I dont plan on doing wholesaling full time. I jumped out there out in faith and feel like ive messed up alot already.
@Tiara B. If you are going to get serious about wholesaling, I would suggest setting up a LLC or S Corp (speak to your accountant) for the wholesaling business. If this is a short term venture, you can use the same LLC but down the road you do not want to be wholesaling under a LLC that has actual assets. Honestly, one wholesale per year will cover the corporation fees and accounting fees. This way if a contract goes south, you are not risking your long-term assets.
@Tiara B. dont bother with the LLC for wholesaling.... What assets are you trying to protect?
I hate to say this to you but going into wholesaling because you couldnt get into rentals will lead to failure. You have to be 100% into wholesaling to be successful. It will take a lot of money and even more time, and if it's only a side gig to raise capital, I would guess there is a 99% failure rate.
My advice is to get a regular job, save some money, build your personal credit, then start looking at rental properties.
Or find family and friends that are willing to invest in/with you.
@Tiara B. read what @Jason D. wrote, read it again, and then once more. Wholesaling is often sold as a quick and easy way to make money but the reality is that it's difficult and takes money and time to get started. I fix-and-flip and have rentals but the majority of my business is wholesaling simply due to personal preference of the business model. I would never recommend getting started with wholesaling as a side gig or without sufficient working capital. Like Jason said, you might be that 1% who doesn't fail, but the odds are entirely against you.
@Tiara Beard I think you should utilize your current LLC. Since you know with wholesaling, when you write out your contract, ensure that their is an assignment contract and that you add a clause that allows you to get out of the contract should you not be able to assign a cash buyer and remove your liability. Once you build up capital, then you can create another LLC to support the wholesaling business. I agree that wholesaling requires some income for marketing to the sellers. I am sure you can DO THIS. Congratulations for identifying the benefits of wholesaling.