Real Estate Investing BusinessTo have a successful real estate investing business you must have several key factors: 1. You should have solid knowledge on real estate investing. 2. You should have ample strategies for buying and renting real estate. 3. You should have a good understanding of how to structure your business.
Go to REI SchoolREI School is a basic online informational class providing a step-by-step instructional method for buying your first (or second, or third) piece of real estate. I have tried to provide a solid knowledge base while simultaneously giving you an outline of what to do in sequential order. Following these steps is a perfect start to your real estate business.REI StrategiesREI Strategies is a good site to learn about different ways to buy real estate. Rental Properties is another site that provides a good understanding of how to have your property be income producing which is essential for your real estate business.Business StructureA successful real estate investing business needs to have the right entity structure to receive the greatest benefits.You can have your real estate investing business be a Sole Proprietorship. This is business structure has the owner and the owner's business grouped together as a single entity. This is the simplest business structure to create because all you have to do is declare yourself a sole proprietorship. You can make this declaration out loud as you read these words and you will instantly have your own real estate investing business. "I am a Sole Proprietor in the business of real estate investing and consulting". Now you can keep and maintain a business expense sheet, receipts, and income. Your office can be 10% of your home where your computer is set up and you do all of your REI business. You can also add an entity structure of a DBA, "Doing Business As". So, it can be the "Say Your Name Sole Proprietorship DBA Say Your Business Name"
Asset ProtectionOther entity structuring allows for asset protection. This entity structuring is different from your business structuring in the sense that these structures make sure that no one can sue you.For your real estate investing business, you might decide that you want to have an LLC, and LP, corporation, a land trust, or more than one of the above combined. A land trust is an agreement where a property is transferred from an individual to a trusted third party, called a "trustee". The individual or grantor is called the "trustor". The trustor grants the property to the trust which is controlled by the trustee. The trustee holds the property for the beneficiary who receives the benefits of the trust. An LP is a limited partnership. It is a partnership where there is one or more partner(s) who is/are passive, meaning the liability to the partnership is limited to the amount of money that was invested by that/those partner(s). An LLC is a limited liability company. It is also known as a limited liability corporation. It is an entity that protects the owners similar to a corporation. The major benefit is that members cannot be held personally liable for debts unless they have signed a personal guarantee. A corporation is an entity that has limited liability, perpetual life, freely transferable shares and centralized management. It exists separate from you as an individual. It protects you personally because any faults of the corporation are not attributable to you as a person.
Combine various entities for optimal protection.Your real estate investing business might be a combination of several entities. For example, you might have a sole proprietorship that does business as a real estate investing company. But this business does not own any of the real estate property. The property is owned by your LLC. Or your property is owned by a land trust. Then the land trust could be owned by the LLC.This intricate weave of entity structuring increases the protection you have against unforeseen life issues that may lead to legal problems. Finally, your real estate investing business needs to have the appropriate amount of insurance. This is another method of protecting yourself. A limited liability corporation umbrella insurance policy is an added padding of protection from the dangers of the litigious society we live in. Real Estate Investing Business Home Page REI Tips
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