Dangerous to wholesale in an LLC
Hey everyone,
I'm starting a wholesaling business In New York and just formed an LLC. I've been doing some research regarding the legality of it and I'm a bit concerned. A lot of the forums I read seem to deal with this topic on an individual level, not from the perspective of doing it in an LLC with the sole purpose of making it a business.
Here is a quote from Billy Gulley's website:
"Where the clouds of the storm move in, acting as an individual in one transaction is much different from a legal standpoint than building a business model that does nothing but assign contracts. Being “in the business” of doing something will require licensing to be legal conducting any business, your local jurisdiction most likely requires a business license as well.
This also goes to the intent of someone entering into a contract where contract law requires a “meeting of the minds” for a valid and enforceable contract. Agreeing to purchase without the intent to purchase is simply fraudulent." - Quote from 'general real estate academy dot com'.
To me, it almost seems like by forming an LLC where the main purpose is to assign contracts, I'm requiring myself to have a business license and am opening myself to a greater possibility of being fined. I also don't have a real estate license but now plan on getting one after educating myself about the legality of wholesaling a bit more. Again, since I'm operating in an LLC i'm not sure if my 'business' is licensed in real estate or only me as an individual. The reason I formed an LLC is for extra legal protection and so I can write off the thousands of dollars of marketing costs I'm going to be spending on sending out mailers. Again, the mailers are being sent out on the behalf of my LLC - I am marketing to buy properties.
When I created the LLC I specifically made my area of business 'Wholesaling Real estate'. Now, i'm wondering if forming an LLC at all was the right idea or if I'm opening myself up to trouble since I'm acting as a business. I'm just trying to start my first legitimate business the proper way and the last thing I want to do is get in trouble. I have a consultation with a lawyer in 2 weeks and will be touching on the same topic along with more focused questions about what I'm allowed to say in my mailers and phone calls to the homeowners I'm targeting.
Any thoughts BP community? I could really use the feedback. Everything was progressing well but now I feel that my goal might be in jeopardy.