Active vs Passive investing

[Mike York]

Hi Everyone! I have a question looking to tap into your knowledge. I am just starting out and I read it's better to keep the active (flipping, wholesaling, etc) in one entity and the passive (rentals) in another. It makes sense to me however, what if my plan is to flip the house first and say after 3 months it doesn't sale so I decide to rent it out? How would that work if I had the 2 entities?

[Bryan Hancock]

This is a long and complicated discussion. You need to consult with your tax folks and legal folks. I disagree that there is no value in having two. There is a ton of value in having two if you structure things properly and have assets to protect. If you have no assets to protect you probably don't need to build too much in the way of defense at this point.