Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Personal Finance
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 5 years ago on . Most recent reply

User Stats

59
Posts
11
Votes
Seyi A.
  • Flipper/Rehabber
  • Chicago, IL
11
Votes |
59
Posts

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

Seyi A.
  • Flipper/Rehabber
  • Chicago, IL
Posted

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?

Most Popular Reply

User Stats

194
Posts
164
Votes
Leah Stuever
  • Realtor
  • Dallas, TX
164
Votes |
194
Posts
Leah Stuever
  • Realtor
  • Dallas, TX
Replied

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

Loading replies...