When do I create a formal business entity (LLC, etc.)?

[John R.]

I would like to get involved in real estate investing and am giving serious consideration to purchase, rehab and resell scenarios. Although, it is hard to ignore (or so it seems) the idea of doing some bird-dogging or wholesaling to get used to the industry and learn. I have absolutely no experience, except regarding purchasing a couple of homes, over the years, to live in. Should I create a formal business entity BEFORE I do anything?

[Joel Owens]

You wouldn't run into a due on sale clause unless there is a senior lien and the seller is wrapping around an existing note.

Example 100,000 senior mortgage and sales price to you is 150,000 and you put 10k down. The wrap note is then created at 140,000 which is subordinate to the senior loan in place.

If there was an existing loan sometimes the lender will just let you assume it. If the sellers place is carrying no debt then they are financing you 100%.

I would just use an attorney for the LLC. You can do it yourself but at least for your first one it's good to get advice.