I am a newbie about to get in the game of wholesaling. I have a few questions. 1. When creating my LLC should I choose a specific type of name for the company that contains certain words (like Investments, Family, etc…) 2. Will I need to sell my LLC to an Investor and create a new one every time I close a deal? 3. When assigning a contract what is a good way to gauge what the assignment fee should be (how much should I sell contracts for). 4. What are the most effective ways to attract and create relationships with Investors? I’ve come across a few but more options never hurt. Thanks a lot for your help. :biggrin
I’m no pro…yet…but there’s no reason to spend $700-1200 on forming an LLC for wholesaling. The tax advantages of business ownership are the same for LLCs and sole proprietorships. Plus, as a wholesaler, you will not be holding assets to protect. You’ll be assigning the contract before closing. You’ll want an LLC to protect assets you’re actually holding. However, if you just want to be able to put LLC on your business card for credibility, that’s different.
If you’re creating an LLC to sell an REO to your buyer (selling the LLC to your buyer), then any name will do. Best to use some or all of the street address as the LLC name. That’s $700 out of your assignment fee each time though.
Once you’ve sold your LLC, you’ll need to create a new one each time, as your old one now belongs to your past buyer.
Doesn’t matter really. Just pick a name you like.
That’s only an exit strategy, not part of your business structure. If you use this exit strategy you’ll just create a new LLC for that particular transaction. You won’t be selling “YOUR” LLC (meaning your main business entity).
Your wholesale fee depends on the numbers of your deal. The bigger the spread & profit the more you charge. Case by case.
Get business cards from the players at your local REIA meetings. Also post a “handyman special, cheap, cash” ad on craigslist and harvest the contact info for each respondent. Don’t worry too much about “creating relationships” with these people, you just find good deals.
On a broader note, what I’m really seeing here is you’re asking yourself “what can I do to make it feel like I’m actually a wholesaler other than finding motivated sellers and making offers?” The most important thing to focus on in wholesaling is locating prospects and making offers. A ton of each.
Don’t worry about LLCs and all that other stuff until you’ve got checks coming in. Take the right action and the next necessary steps will quickly reveal themselves.
- Locate prospects
- Prescreen prospects
- Construct & present offers
- Follow up (see what needs to be done done)
- Sell quickly
I recorded podcasts episode 022 - 026 that explains in detail exactly how to:
- Set up you business.
- Find cash buyers and how to build relationships
- Finding Motivated Sellers
- Negotiating with Sellers
- Closing the Deal.
- Getting Your Check.
Is free, I think it will help you out a lot:
i would put my input but it would be the exact same advice that everyone has givin im just curious as to what state forms LLC’s for 700-1200?? im in michigan it only cost us $100 that sound like your forming inc’s
Helllo, I am intersted in the podcast you speak of, Link??
The link is in his Member Default Signature area at the bottom of all of his posts.
Thank you all very much for the info. All of this is very helpful. E-Book was really good. It gave me the confidence boost I needed to move 4ward. I’m nervous as heck but I’m going to move 4ward. Anything else you all think I should be cautious of before getting started?
Just remember this: as a wholesaler, when you get a deal under contract your only risk is your deposit, which in the case of a FSBO should be only $10. Just keep in mind that’s all you really have to lose.
What I have found is that one of the best ways to build relationships with investors is to bring them good deals. They will certainly be interested in working with you as you bring them good deals and they know that you are professional in your dealings. You’ll make mistakes along the way but make them and keep going. Don’t let it stop you. Best wishes.