They’re not just working harder; they’re working smarter with the S-Corporation tax strategy.But before we dive in, let’s clear one thing up:*This only works for active income.That means flipping, wholesaling, commissions, construction, or property management income.It does not apply to rental properties or long-term passive investments — and putting rentals inside an S-Corp is one of the worst tax mistakes you can make.Let’s break it all down:Step 1: Why the S-Corp Exists (and Who It’s For)An S-Corporation (S-Corp) is not a special type of company; it’s a tax election.You can form an LLC, then elect for it to be taxed as an S-Corp.It’s perfect for people earning active income — anything where you work for the money:-Flipping houses-Wholesaling deals-Real estate commissions-Property management fees-Contracting or constructionHere’s why:A sole proprietor or regular LLC pays self-employment tax (15.3%) on all net income.An S-Corp lets you split your income between:a “reasonable salary” (subject to payroll tax)and “distributions” (not subject to self-employment tax).That simple shift can easily save five figures a year once your business income hits the six-figure mark.Step 2: How the Wealthy Use It to Build Explosive WealthHere’s the play wealthy entrepreneurs use again and again:They pay themselves smart, not just more.Set a reasonable salary — what the IRS expects for your role — and take the rest as distributions to cut payroll taxes.They reinvest the savings.The extra cash that would’ve gone to taxes gets redeployed into more flips, marketing, or acquisitions — compounding their growth.They hire strategically.Many bring family members into legitimate roles, shifting income and creating generational wealth legally.They layer entities.Example:S-Corp runs the active business (flipping / wholesaling / management).LLCs hold the long-term rentals.That separation protects liability and keeps tax treatment clean.Why S-Corps Don’t Work for Rental PropertiesHere’s where many investors go wrong — using an S-Corp to hold rentals.

@Colin StewartWholesaling gives you active income taxed like regular earnings.Once profits grow, use an S corp to cut self-employment taxes by splitting pay and dividends.Rentals create passive losses through depreciation and expenses.Use those losses to offset wholesaling income.With the right setup, you can combine both to reduce or even eliminate taxes.This post does not create a CPA-client relationship.

We are learning (I am studying for my real estate license) and researching a diversified arena feom short term rentals, wholesaling and flipping. 

. - when wholesaling, it is most effective to find off-market deals so that you can be direct to the seller and have more control over the deal. 

This is one of the most common bottlenecks in real estate wholesaling: people spend all their time, energy, and money getting deals — but almost none on building a real buyers list.Build Your Buyers List Like You Build Your MarketingYour buyers list deserves the same urgency, effort, and consistency that you put into your acquisition marketing.When you have a strong, engaged buyers list:You sell properties faster.You get higher profits.You don’t have to chase or beg for buyers.Instead of becoming a motivated seller for your own contracts, you flip the script.

Hi everyone, I’m just starting in wholesaling and based in the Wilkes-Barre/Scranton area.

I suggest you listen to free podcasts on land wholesaling, build a business plan, and then work it (Wholesaling Inc is a great one).  

This is what I call "earning your stripes", and it is for the better that you learn these lessons early on in your career as they make you a more shrewd investor.Here's my background: It took me 8 months after initially learning about wholesaling to close my first deal.

I would do some wholesaling but take some the deal on yourself. 

That drive is what this business is built on.A quick thought: don’t box yourself in with just one strategy (like wholesaling).