I’ve been reading through the LIREIA board and I can’t seem to find out what type of entity is used to wholesale properties in NY. I’m currently using the “21-days” wholesaling course by Sherman Ragland of the DCREIA(I’m originally from MD) and he recommends forming an LLC when wholesaling a property, in order to limit personal liability. However, I’ve notice that NY is a different. What exactly to wholesalers in NY do in order to limit liability when wholesaling properties?
Don’t hurt yourself…you probably won’t find it in writing as a “standard”…
Keith
I would say first do not let it stop you from doing a deal first, do it in a d.b.a. fashion(doing business as…)just make sure to register your business name at the town and with the state.
My advice on entity formation, this is taken from an attorney, who is my mentor and a practicing investor for the past 20 years, but it is only advice and not definite legal council! I think an LLC should be used for buy-and -hold strategies, and wholesaling or flipping should be done in an S-Corp or C-Corp.
I am not 100% sure what the exact reasons for a corporation being the best entity for wholesaling, but I know it has to do with having different regulations and safegaurds in place to protect you better than an LLC may…
Hope that helps
The LLC/corp discussion regarding RE strategies is really a discussion on taxation. From a liability perspective, you are personally responsible for whatever personal actions you make in the name of the business that cause an injury. Entities never have and never will limit that type of liability.
Just do your deal and comply with whatever laws regulate the activity.
i don’t plan on letting it stop me. But I’m following a method and sometimes the method is not universal, so I’m trying to adapt by asking questions. On the LLC vs. S-Corp/C-corp I learned it the other way around ie. use LLCs to wholesale because it’s relatively easy to transfer a LLC but use S-corp/C-corps for long term buy and hold strategies.