I am afraid Fannie/Freddie might look at a sole-proprietor LLC the same as your personal holdings.

The type of deal will inform the structure of your business (if you even need a structure other than sole proprietor) and the team members who will be important.

Since my partner and I are on the deed and are operating currently as sole proprietors, I don't think it makes sense to "form a business" with a separate tax id number just to open a bank account with the PM company.

We ran our small mom & pop lending company as sole proprietors for years in CA, doing what you do.

Furthermore, if your rental activity results in a loss for the year, you can use the net passive loss allowance to offset up to $25K in ordinary income on your 1040.Most of these tax advantages would be lost if your rental property is held in a C-corp.You still have all these tax advantages whether you own the rental property in your own name or in the name of some passthrough entity such as an LLC or an S-corp. .As far as I can tell, there are no tax benefits available to a rental property activity owned by a passthrough business entity that you don't enjoy as a sole proprietor.

So, it's treated the same as if you are sole proprietor.

i misunderstood your overall argument (because i did not read the entire post) :oops: if you're a sole proprietor, or just Joe investing in rentals and your plan is to amass many rental properties in order to build a gross monthly income of 50k a month - then financially speaking - you are probably right (again, i'm no CPA).but if someone is interested in building a business and a business reputation, offering services to the public such as rehabs, construction, rentals, commercial - an LLC or CORP offer maximum potential for growth.what do you think?

@Ned CareyProperty flipping, even if you only do one as a sole proprietor, is an active income business reported on Schedule C.  

What kind of protection is it for a sole proprietor like Joe Fish dba RE Investor?

Generally speaking there is a profit-sharing contribution that can be either 20% of your net business income if a sole-proprietor or other pass-through entity is used, or 25% of W-2 wages if a corporation.