Hello I am new to this website. I am looking to start an independent Bird Dog business, but I had a few questions. Since I am starting this business independently, do I need to register the business as a legal business? I.e. through Legalzoom.com as a Sole Proprietorship? If I were to add more people to my team, would I then have to register as a LLC?
before you start the business i would suggest you start finding deals…
A mistake a lot of “Wantrepreneurs” make is to get the LLC, office, new computer, office supplies, secretary, phone systems, ETC…
Do a deal first, then worry about setting everything else.
To answer your question… If you REALLY want to protect your personal assets, use a real estate lawyer to draft the LLC for you…
No, you will be paid a marketing fee. Probably under the table. Of course signing a W-2 is the legal way to do it. You can use your SSN for EIN’s if you are simply dba…
I.e. through Legalzoom.com as a Sole Proprietorship?Nope.
If I were to add more people to my team, would I then have to register as a LLC?
Definitely not. Your team is people who work for you. As a birddog you’ll be working for other people. It’s the mailroom of Real Estate Investing. You get to know who is who by bringing them deals. You get to learn how the business works by finding deals. And then one day, a light bulb goes on in your head and you decide, it’s time to stop making $1,000 a deal, it’s time to start making $5,000 and you become a wholesaler.
Yea start doing deals first and let that determine what you do.
You can go to the state, you can use land trusts, you can use an attorney, a tax accountant, and buy a thick book on what questions to ask your attorney since they are very expensive per hour that way you will be more prepared for your meeting. There are LLC attorney’s that are in that business specifically.
I have a couple related questions on this topic. One person responded that bird dogs generally get paid under the table. What sort of paperwork (agreements) does the bird dogger write up with the buyer to make sure the buyer gives him/her the fee for having found the property? Does anyone have an example of that agreement? Are there any further agreements and paperwork the bird dogger needs to be aware of or use?
Secondly, I’ve heard that depending on real estate laws in each state, one has to be very careful exactly how they do the deals when bird dogging, so as not to do them illegally, since Real Estate Agents are supposed to be the ones finding properties for people. Does anyone know where you would find info on the real estate laws or how to create the agreement so it is legal and doesn’t step on the toes of the licensed Realtors? I am in Ohio, btw, so any specific Ohio directives would be of help. Also, I’m very new. Still in the thinking part of things. :banghead
Get a deal under contract first. Close a deal. Then LLC.
It’s funny, people still think I’m doing something illegal when they see me making some profits wholesaling junker houses. Even some of my own family members. I try to explain the concept of equitable interest, which gives me the legal right to buy and sell properties that I dont own, but still they look at me sideways.
As a wholesaler or flipping houses with options and doing Lease options, I wont get an LLC. If I start to buy and hold I will put these properties in a land trust to protect my assets.
I would have to agree with everyone’s response to skreel inquiry. If you are already out bird dogging, all you have to do is put the rest of the pieces to the puzzle together. Learn how to find a deal, which you are already doing. Educate on yourself on the skill of how to negotiate and what price you need to be buying at. Next comes aligning the property with a cash buyer and assign the property to them for a hefty proftit, than your normal traditional $500-$1000 bird dog pay out.
I took a Rich Dad course and he recommended setting up a corporation and getting a cpa asap. This doesn’t take much money to start. Are you wholesaling or just finding leads for investors?
Don’t complicate things, and stop taking advice from people who are not already doing what you want to do, such as agents and any know-it-alls that are ‘into real estate’ by theory only.
And stop operating from a defensive position where you’re continually looking over your shoulder afraid of breaking some law. That’s not an empowering mindset or position, and is simply disguised fear of failure. Forget that.
Fredd is right. Focus on finding a deal, and pushing the deal through, until you cash a check.
Forget how well it goes the first time around (or 2nd time). Just make sure it finally ‘goes’.
After that, you’ll have a more precise idea of how to move forward the next time, even if things go completely wheels up the first time around.
Until you’ve got more than about $250,000 in assets you don’t need a bunch of legal entities to protect yourself. Even then you could encumber those assets to make them less attractive.
Just focus 110% of your efforts on pocketing your first check, not getting all ‘legalzoomed’.
I’m just curious and I am in no way experienced, but when you just jump in and use your own name, are you making sure to record your profits as income ? Because to me, I would rather all money go to the business and deduct business expenses.