Wholesaling "Business" question

[Drew Farnese]

Hey guys!

Through reading and searching here, I found a part of my question answered - "Do I need to start a business to wholesale or can I do it personally?"

I understand that you do not need to start a business, but can anyone tell me the pros and cons as to starting or not starting a business for it?

Tax advantages are the first thing that pop into my mind.

Thanks!

[Brian Burke]

You can't avoid "starting a business" even if it is just Drew Farnese out there wholesaling homes. Regardless of how you do it, you would have to claim the income, and you would want to offset that income with your expenses. This would be done on your tax return on schedule C. No matter how you look at it, it's a business.

A different question is whether you give your business a name by filing a fictitious business name statement (AKA doing business as or DBA) or take it even one step further and form a legal entity such as a corporation or LLC.

An advantage of having a named business is that it might add a sense of legitimacy in the eyes of some. I don't see any big advantage to forming an entity at this point. Entities are overrated and overused and add significantly to the expense, which is money that is better used on marketing when you are just getting started or have limited resources. Save the entity stuff for when you really need it.