Reinvesting in the business (How to structure paying self)

[Jamie Parker]

In my first stint in real estate, I thought reinvesting in the business was keeping the marketing engine running. At the time I was running on direct mail. I thought reinvesting in the business was partially investing in education. I justified going to the 10X Growth Con in 2017 and a couple local investor seminars. Only thing I got out of those events were I didn't understand how to get to the next level (no fault of the events, I take responsibility of my on inability to make the connections in the content).  Taking notes and asking questions only got me deeper in the weeds as if I was asking the wrong question. 

After purchasing my first property last year, I have resumed cold calling after purchasing a second property this year. Closed my first wholesale deal in 5 years. But now, I am more concerned with entity structure. I wholesale in LLC #1, and the 2 properties i purchased is in my name currently.

The big question for me: When I start to build, should the properties be held in an entity? I will need to partner with a builder to get financing. Secondly, should Building LLC be separate from Wholesaling LLC(currently being used for wholesaling). Who should I or do i talk to about getting things more compartmentalized. I recently ordered a survey on the two lots I own, and realized that I may be approaching this the wrong way.

For clarity, as i understand the concept of reinvesting in the business, each "Bucket" should eventually fund itself without the need for cash injections or contributions. Where or when is the point should I consider this or can just start out at any point? 

Any thoughts?  

[Michael Plaks]

@Jamie Parker

The only justification for going to 10X is to snap a selfie with Uncle G and post it on Insta to "keep up" with your buddies. Otherwise a total waste of time and money.

Likewise entities, "building my team", "setting everything up correctly" and all that other fluff that benefits only people who set it up for you. 

Drop trying to "think like a businessman", "reinvest in your business", "level up" etc - the fewer empty words you pollute your brain with, the clearer is your thinking.

Now, off of my weekend soap box. 

The simpler your setup, the better:
- Since you already have an LLC, keep using it. One is enough.
- Wholesaling and flipping (which is what you mean by "building", I assume) in the same LLC
- Pay all business out of business, pay all personal out of personal. Transfer money between business and personal infrequently and in round numbers.
- Once it looks like you are going to clear $50k for the year - after everything is deducted! - then get with an accountant and discuss whether it makes sense to convert your LLC to an S-corp. But don't do it too early.
- Spend your time and energy on getting deals, not on imitating podcast hosts.

Good luck.