Should you split wholesaling and flipping into two different LLCs

[Ryan Mulson]

Hi everyone,

So I am looking at getting into direct mail to generate leads for our flipping business and since the general consensus is you need to be consistently mailing in order to keep the deals flowing, I figured it would make sense to try and wholesale whatever deals that we are unable to flip ourselves. My question is does it make sense to split the business functions into two different LLCs for tax/liability purposes or should I just keep them together? And if I should split them, then how would I allocate the marketing budgets and the deal paperwork? I know that this is a technical legal/accounting question and I plan on consulting my lawyer about it, but I wanted to get some opinions. Thanks  

[Steve Vaughan]

Nah.  Wholesaling and flipping are both active income 'operator' activities. 

For a different purpose, like buy and hold, I would and do.  Income there is 'passive'.  Don't mix income types.

Just a laymen's opinion with limited information provided.  Your overall financial picture may change things. Talk to a legal and tax pro as you mention.  Good luck @Ryan Mulson!