All Forum Posts by: Bill Walston

I'm with Brian - black on yellow works best for me. And even with the array of cards Michael posted (and they were great) it seems the mail merged canary pulled the best. I guess sometimes simple is better :-)

Good going on finding a property. A P&S would work. What's referred to as a "flex option" also works well for wholesale deals. Just do a search in the forums on "flex option." You'll find lots of info there :-)

Hope this helps.

Great idea! You have my vote, though at #43 it doesn't change the percentage :-) Don't ya just love it when a plan comes together?

Hi Michael,

My answer would depend on how you intend to convey the property.

Assuming that you are going to transfer the deed and just hold the paper Steve is spot on. The same would be true if you sell via Contract for Deed. If you sell by Lease Option, you would take out a landowner's policy and strongly urge your tenant buyer to secure a teant's policy.

Hope this helps.

I've heard "Deal on Wheels," by Lonnie Scruggs is good. I've not read it myself, but do know it has excellent reviews.

Hi Tom,

Did you disclose to ASC that you were planning on selling the property immediately? All of my docs state that I am an investor and I'm buying the property with the intention of selling for a profit.

Hi Bill,
Sounds like you are suggesting an LLC taxed as a partnership, correct? Is there a reason that you would choose that option rather than that being taxed as a corporation? The corporate election would eliminate the self-employment taxes that would be incurred under the partnership option. Regards, Bill

You may not be a tax professional but you are absolutely spot on here. An LLC is a disregarded entity for federal (and most state) tax purposes. That means that unless an election is made to be treated as either an S or C corp for tax purposes, a single member LLC will be taxed as a sole proprietorship and a 2+ member LLC will be taxed as a partnership. In each of the latter two instances a wholesaler will incur the self-employment tax. By electing to be taxed as a corporation self-employment tax would not be an issue. Of course, the LLC would then be subject to corporate tax rules and the advantages and disadvantages of that election would have to be weighed in order to make an informed decision.

Irrespective of whether you elect to be taxed as a corporation, sole proprietorship, or partnership the LLC has proven itself to be the most valuable business entity for real estate investors. This entity provides the greatest flexibility and provides some very nice tax and asset protection benefits.

BUT - be sure to run this by your own tax pro (preferably one who understands real estate investing). He or she should be in the best position to advise you :-)

Hi Andy,

If your only real estate transactions are wholesales, you WILL be classifed a "dealer" by the IRS. As such, your income will be classified as self-employment income and in addition to your regular income tax you will be subject to the 15.3% self-employment tax. Dealer profits are not entitled to long-term capital gains rates regardless of the length of time the property is held. (The property is considered inventory.) If you buy/sell in your name as an individual, you may also have a higher audit risk since you would have to file as a sole proprietor. That's why we recommend that wholesalers use a business entity such as an LLC or corporation for his/her real estate transactions.

Hi Bryan,

Welcome to BP! You're gonna love it here. Make sure to ask lot's of questions .. .. we have answers :-)