Business Entity for The Note Business

[Account Closed]

I'm about to start a business entity in California but I'm not sure which entity structure would work the best for my Note business. Currently my focus is on seller carry back notes, but I'd like entity to be flexible enough to accommodate other Note investments like 1 & 2nd Notes, performing and nonperforming. Also, it would be flexible enough to handle actual real estate since given enough time I'll probably end up owning some property. 

My plan was to start an LLC in Wyoming for its asset protection qualities. Then open a California LLC and have it be owned by the Wyoming, LLC. If I understand this correctly, in doing it this way the California LLC would "adopt" some of the business protections so to speak of Wyoming's state laws. I welcome someone setting me straight here if I'm off-base. I've already completed the first part of this process and am now on the California part, but questions about irrevocable trusts, and hybrid trusts got me thinking about other options. 

I was told by some to start as a sole proprietorship (SP), then once business picks up I could change the business entity type. Staying small, uncomplicated and inexpensive in the beginning would be best, as is obvious.  

What about an irrevocable trust? What a SP best for me right now? Is my thinking about the LLC the right way to go about it.

I'm looking for asset protection, tax avoidance and a way to pass the business to my heirs as smoothly as possible. 

What was your choice and why? Have you considered a trust? What was your conclusion? I'd like feedback from those who've actually went through with this process. 

I look forward to hearing your responses and let me say in advance, thank you so much for taking the time to read this and/or respond. 

[Bill S.]

@Account Closed I would love to help you but I am not an attorney and don't know your business well enough.

Here is the general take I have on LLCs and business entities. If you have enough money worry about which way to go, you should hire attorneys to guide you. If you don't have enough money to hire attorneys then you are wasting your time worrying about the wrong stuff. Better to put your energy toward finding notes than figuring out the way to structure your business that won't apply for several years if you are best case successful.

I'm not busting on you but want to give some practical guidance. There are thousands of threads on BP alone on this very topic. Use the search feature and read a few dozen of them. Start with the longer ones as they sometimes contain more detailed information or address specific situations that could touch on your situation.