Real Estate Laws in Pennsylvania?

Question

So I was just about to do a Google search on real estate laws in Pennsylvania, then I thought, why don't I just hop on the Bigger Pockets forum and ask some actual investors from Pennsylvania. I'll probably get better and quicker answers from them. So, what about laws concerning real estate here in PA? You see I'm brand new to real estate so I want to make sure I understand everything. First off, from what I understand, you do not need a real estate license to invest, correct? Also what is the best business structure? Corporation? LLC? What about bird dogging and wholesaling laws? Is PA a tax lien or tax deed state? I'm sure I'll think of more questions later. In the mean time though, I would love to hear from any one who is currently investing here in PA who has the answers to any of the questions I just asked. I just want to make sure that I'm clear on the basics. Happy Investing everyone!

Thomas Evanchik · Answer

What type of deed should I use in Pa for REI?

Levi F. · Answer

We (myself and one partner) invest in western PA. Our law team set us up an S corp to act as general partner in a limited partnership. It was expensive but they were confident and it works for our strategy. We own commercial and residential buildings. I do not see a benefit in a real estate license. We use an accounting firm, law team, a real estate agent, and a property manager. We are exclusively buy and hold for now. As far as the rest of your questions I am no help. I use this site for information and it is always helpful. Use what you learn here and what your team suggests to build a business thats right for you. My only suggestion would be to structure your foundation for growth. Do it right once.

good luck

Account Closed · Answer

So guys I am interested in buying and holding rental properties. Do you think a license would benefit me for that. Also, I'm not quite sure about the requirements of getting a license or how to go about getting one. When I look up requirements for getting a license in PA it brings up salesperson requirements, broker requirements and appraiser requirements. Would the investor go after the salesperson license? It looks to me like that's the only one that doesn't require a bachelors/associates degree or prior experience in real estate.

Account Closed · Answer

Thanks!

Thomas Price · Answer

Terry H. I simply just signed up and paid. I will have to be under a broker to get my license though. You can't just freelance it. there are yearly fees involved. I would suggest contacting a local RE Attorney and even a local broker to get full info on what you should do. Most professionals are more than willing to give you info and guide you. At least in my experiences. Again, I'm not the "Know All" as I am new at this myself. I am only relaying what I have taken in so far. And I agree with John Moore, I have done a lot of researching on the tax issue and there is alot to cover. I still think you should check out those two books I suggested. They both cover alot of the aspects. Also, contact and make friends with your local Tax Claim Bureau representatives. They are your source for the whole thing. I walked in and met our director while everyone else was on lunch and we talked for 45 mins and at that time I had no idea what I was talking about, but now we are on email terms and I get all kinds of info.

Account Closed · Answer

Another thing I was wondering. Do I need a federal and a state tax ID number, or just a state or just a federal? I want to make sure I know which one of those I need, if not both.

Account Closed · Answer

Thomas Price. I would like to be a buy and hold investor. A land lord. What are the requirements for getting a real estate license? I know you need to take courses but don't you need some sort of college degree in order to take the test to get your license? Thank you for your response.

Steve Babiak · Answer

I have to emphasize that specific point from John Moore's post.  Not only is that a true statement, but the statutes and law that PA has for this is all over the place; there is not just one place in the statutes where you can go looking and find everything real estate related.  PA is a tax deed state, but IMO there are several different variations on those tax sales that you have to learn and understand before pursuing a tax sale.

John Moore · Answer

A PA real estate license would assist you in many ways, it could also restrict you in other ways.  In PA as well as most other States the Real Estate Broker is responsible for you're actions and in many ways this is a plus in another way you may not wish to disclose you're plans so this could be a problem.  Selecting the right combination of RE Broker could be the right thing for you.  You're getting a mentor, a person you can bounce you're ideas off of and he will certainly keep you legal as his license  is at risk.  Selecting the right combination of mentor and motivator might be what the doctor ordered.  In PA their are many tax sales and varieties the important concerns are title searches to determine what liens exist, such as mortgages, tax liens, home owners association dues, etc.
You have taken the most important step, you have become a member of BP, welcome aboard.  I hope I've given you food for thought.

Thomas Price · Answer

Hi Terry H. I am a Pa REI. Although I have only been doing this for about 6 months, I have done extensive research on all kinds of topics. Some things I can answer for you, some I'm not sure about yet. So here we go

1)Welcome to BP and the world of REI

2)To be an investor in Pa you do not need a RE license. However, Depending on which area of investing you are looking to go into, it may or may not be helpful. I am doing a couple of different strategies so for what I am doing it would be a huge advantage for me, hence, I am currently in an online course to do so. Which BTW, is approved for the Commonwealth. I like do at your own pace stuff because classrooms just slow me down.

3)Again this question would have to be answered by what type of investing you are looking to do and how much protection you need for yourself. Again, our business is set up as an LLC because that works for us. I would not make that decision lightly. Contact a local RE attorney. You will want to have one as part of your power team anyways so why not just get that one taken care of. Our LLC cost $1,100.

4) Pa is a deed state. However, with you being in reading, You might want to look at Maryland for tax liens if you are interested in that. When we first decided to plunge into REI we were first looking at tax issue properties and that's how I found that out. We will still use it as a strategy, just with a twist. If you are going that route I have 2 book suggestions: The 16% Solution by Joel Moskowitz and The Deedgrabber by Richard Dawson. Both books have valuable information on Tax properties although I'm not following them to the letter. I believe in refining what I learn.

5) you didn't ask "What to do next" but I'll offer it anyways. Put a power team together. No one can do REI by themselves and some people think that asking for help is a sign of weakness. people though Ford was ignorant because he didn't have an education and therefore wasn't deserving of the fortune he acquired, but when he was questioned about things he had no idea about and then degraded because of it he simply answered " why should I waste time learning things other people already know when I can just push a button and have them come tell me the answer?" (from the book Think and Grow Rich by Napoleon Hill). Brilliant!!

Hope this helped in some way. Good Luck and be active!!