Legal Structure for Rental & Wholesale Operations

2 Replies

I own 9 rental houses which cover all of my living expenses. Along the way of acquiring those, I sometimes came across a deal that wasn't for me, so would wholesale it out to a friend or another investor. I'm considering going into real estate full time.

I already have my rentals wrapped up in an LLC, but if I were to start wholesaling more would I wrap that into the same LLC or should I start a separate entity? If I should keep them separate, should that also be an LLC, S-Corp or something else?

Originally posted by @Tucker Cummings :

I own 9 rental houses which cover all of my living expenses. Along the way of acquiring those, I sometimes came across a deal that wasn't for me, so would wholesale it out to a friend or another investor. I'm considering going into real estate full time.

I already have my rentals wrapped up in an LLC, but if I were to start wholesaling more would I wrap that into the same LLC or should I start a separate entity? If I should keep them separate, should that also be an LLC, S-Corp or something else?

This is awesome. I am sure an attorney will chime into the legal issue here. 

From a very basic tax standpoint, if you think you are going to excel at wholesaling, you would need another entity and will eventually tax as S-corp. 

I would always recommend holding each asset and company in a separate LLC (or other entity depending on tax ramifications) to mitigate risks stemming from one asset to another.