Being Paid as a Contractor instead of a W2 Employee at a new job

[Seyi A.]

I recently started my real estate investing adventure and, like most people, one of the challenges you encounter early on is financing.  I'm not quite at the stage where I want to bring on investors, so I am relying on my W2 income get approved for a loan.

I am considering starting a new job and am wondering whether it would be a good idea to have the new employer pay me as an independent contractor (i.e. I'll get a 1099) instead of a W2 employee.  My rationale is that I already have a C-Corp set up for my active real estate investing (wholesaling, flipping and property management), of which I am an employee and receive a salary, that has a 401k and I have health insurance via my spouse. Having the new employer pay my C-Corp would allow me to increase my salary from my C-Corp and make my income "cleaner" to potential lenders.  One other thing I like about this is that my C-Corp's 401k is much more flexible than what most employers offer and I can potentially use it for real estate investments via purchasing qualified employer securities in my C-Corp.  Naturally, the "fee" I would negotiate with the new employer would be higher than the equivalent salary to compensate for all the benefits I'd be giving up.

Are there any downsides/pitfalls to this?

[Leah Stuever]

Employers cannot choose how they pay you. If you are an employee by definition they have to pay you via W2/paystub. If you are an independent contractor they have to pay you via 1099