Later when start earning more and more on each deal you may venture in creating a business entity.

On the other hand, you may sell less but you get to keep 100% of what you earn.

Many states have laws for property managers to help ensure that the PM isn't dipping into the escrow account before the money is earned. 

Was wondering your opinions...Right now I have roughly $160,000 in expendable cash sitting in my bank account - all tax clear money I earned through my online businesses.

A couple things to note if you are going online to look for private lenders... there are differences in expectation depending on who's calling themselves a private lender.First are the true private money lenders that lend their own money from a retirement account or want to put cash to work and earn interest and points to local investors that they know and trust.Next are private lenders that have raised capital for their fund and underwrite deals based on more stringent criteria.

Instead of holding the paper to term, these lenders are looking to earn the up-front fees before selling the note in the secondary market.

If so, to overcome this problem, could we form an LLC and segregate the equity from the share of distributions (at least until I've recouped my initial investment/ earned a healthy return)?

C-corporations have double taxation (tax on income at the corporate level, and tax on dividends when earnings and profits are distributed to the shareholder/member), while S-corporations are flow-through (so no double tax).

. ($160k+$50k / $300k = 70%)   The reason behind this (especially for flippers and builders) is you need at least 30% margin because that money is considered earned income when you sell short term and by the time you pay taxes you really are not making as much as you thought.

If so, to overcome this problem, could we form an LLC and segregate the equity from the share of distributions (at least until I've recouped my initial investment/ earned a healthy return)?