Co. Tiers for Protection: REI Tech Co, Prop Mgmt, Construction, Sales

[Taylor Jennings]

I can't begin to tell you how grateful I am if I can get just a few startup questions answered...

ENTITIES

• Real Estate Brokerage
• REI Tech Company.com
• Property Mgmt Co
• Construction Co
• Financing Co
• REI Tech Co Apps/Software (IP Involved)
• REI Marketing & Acquisitions
• REI Fix & Flip Co (Same Co as M&A)
• REI Buy & Hold Co
• REI Joint Ventures (Flips & Holds)

Q: It's been advised that we separate each division beneath one Parent Company 'PCo'.

Our Dilemma

The REI Tech Co would be a platform to make offers, auction, and buy Real Estate similar to RealtyBid.com, Auction.com, and Hubzu.com only targeted toward a completely different niche.

We intended to charge a Buyer/Seller premium which would be based on a % of the total offer/listing/bid (TBD) in addition to fees for premium services (featuring property, BPO, web based tools, privileges, etc).

No doubt the % would be viewed as a consideration for a Real Estate Transaction so the Tech co would need to be licensed.

The buyer would have the option to use our Construction Co 'CCo' for rehabs/maintenance and Property Mgmt 'PM'. The PM Co would also need to be licensed.

Knowing that PM companies have a higher level of legal risk we wanted to separate the PM from the Tech Co. (Instead of having the PM under the Tech Co if the Tech Co were the brokerage)

Q: Our thinking is that the PCo should be the brokerage with all of the listed companies (above) beneath it?

Q: This would allow us to utilize the Real Estate Licensing for any entity while keeping each sibling separate?

Our concern is that the PCo Brokerage will become one massive capital cow. (S-Corp)

Our understanding is that any consideration from a RE transaction must be received and re-distributed by a RE Brokerage. (Revenues from PM and Tech Co sales)

Q: Is there any limitation for how much we can pay a Child Co for services/commission?

Q: Is a Child Co, unrelated to Real Estate, required to pay a portion of all revenue back to the PCo?

It was helpful putting this on paper and will be overwhelmingly helpful with your feedback. We thank you so much for taking the time to read our post and for your feedback.

We can't thank you enough...