Never Rely On One Business Name. Here’s Why…

structure brand namesIf you're in the business of “flipping” real estate (i.e. – buying undervalued properties and selling them at a significant markup), one issue you'll eventually have to address is how to brand yourself as a buyer and how to brand yourself as a seller.

In a very real way, you'll be wearing two separate hats in this business. On one hand – you'll be running an acquisition company that buys undervalued assets from highly motivated sellers. On the other hand – you'll also be running a real estate selling platform where you need to showcase these assets in their best light and sell them for much more than you paid.

It's like operating two separate machines that perform completely different duties. Given their inherent differences, it often makes sense to establish two separate brand names for your business in order to perform these roles without confusing your customers.

Disclaimer: Before we go any further, please be aware that I am not an attorney and this article should not be interpreted as legal advice. Every business and situation contains different attributes that may affect the validity of this approach, so be sure to review this strategy with your own legal counsel before proceeding.

What's in a Name?

When I started flipping vacant land properties, I found out pretty quickly that using one, SINGLE name as an umbrella for all of my buying and selling activity (sharing the same website, phone number, logo, etc.) left the door open to a lot of unnecessary problems. It was basically an open invitation for both buyers and sellers to see how they were getting the wrong end of the deal.

For obvious reasons, when I bought a property for $5,000, I didn't want that same seller to check back in the next day only to see that I was listing it for $50,000. When you use the same platform to communicate with EVERYONE, you're asking for this kind of trouble.

Of course, there's nothing technically wrong with buying low and selling high, regardless of who sees it… but I'm not here to discuss the ethics behind the business model (you can read more about that here). I'm here to talk about how a real estate investor can avoid these awkward confrontations altogether by simply structuring their company names in such a way that the buying arm of the business looks like an entirely different company than the selling arm of the same business.

Understanding Trade Names

Did you know that many of the biggest brand names in the world are owned by companies you'd never recognize? For example…

  • The brand name Subway is owned by Doctor's Associates Inc.
  • The hotel brand Hampton Inn is owned by Hilton Franchise Holding LLC.
  • The restaurant chain Waffle House is owned by SunQuesT Systems, Inc.
  • The hotel brands Comfort Inn, Econolodge, Clarion, Rodeway Inn, and Sleep Inn are all trade names owned by Choice Hotels International, Inc.

Why do these big corporations masquerade under one or more different names like this? Because these “trade names” are more memorable, brandable, sound better, make it easier to file for trademarks and not to mention, they allow one business entity to operate under more than one name, and a lot of companies do it.

How to Register a Trade Name

We can do the exact same thing by registering for a trade name (aka – “assumed name”, “fictitious business name”, “doing business as”, “dba”) in the state where we're doing business.

Rocket-Lawyer-LogoRegistering for a trade name isn't difficult, but it's one of those procedures that requires a different set of paperwork in every state… which can make the process seem more complicated than it is. If you're looking for an easier, streamlined way to make it happen, you can also use a service like RocketLawyer (aff link) to get the job done with less hassle.

When the state has approved your registration for an assumed name, you'll be allowed to operate your business entity under this second name, and if you've chosen the name wisely, it won't give any obvious links back to the true identity of the legal entity behind the trade name.

Keep in mind, even when the registration for your trade name is complete, it's still referring to the same business entity – the state will simply recognize your new name as another unique identifier for your corporation or LLC.

Establishing Your Buying Identity

Let's say you've already registered for an LLC under the name “Summit Land Properties, LLC” in whatever state you're doing business.

If you wanted, you could either register for a new “assumed name”, or alternatively – since this name already sounds like a good fit for the buying arm of a land investing business, you could use this given name as the brand for your buying website.

Your domain name could be something like this (assuming it's available):

www.summitlandproperties.com

Your logo could look like this:

Summit Land Properties, LLC-logo

You could even get a “vanity” phone number through a service like RingCentral. For example:

555-4-SUMMIT

And since you would own the domain www.summitlandproperties.com, your email address could be: name@summitlandproperties.com.

With all of these things in place, the BUYING side of your business would have a pretty solid corporate identity.

Establishing Your Selling Identity

What about the SELLING side of your business? Do you need to create another LLC for this??

Not hardly… this is where your trade name comes into play.

Since you already own “Summit Land Properties, LLC” and it's acting as the brand name for your buying website – it's just a matter of filing for a new trade name to be the face of your selling platform.

Let's say you register for an assumed name of “Grand River Land Company”.

Once this request is approved by the state, you can effectively operate your company as Summit Land Properties, LLC OR Grand River Land Company – and both names will effectively refer to the same legal business entity.

So let's flesh out the selling side of the business… in this case, the domain for your selling website could be something like this (again, assuming it's available):

www.grandriverland.co

Your logo could look like this:

Grand River Land Company-logo

And again, you could get another separate “vanity” phone number through a service like RingCentral (something like this):

555-GRAND-4U

(Note: Vanity numbers are completely unnecessary… I only mention it here to illustrate the fact that it's a good idea to have two separate phone numbers – one for each function of your business.)

And again, since you already own the domain www.grandriverland.co, your email address could be: name@grandriverland.co.

As you can see – with a registered trade name, you can refer to your business with one name or the other and to the outside world, it effectively looks like two different companies with no apparent connection – even though everything is flowing through the same bank account and is reported as one entity on the same tax return.

Using the Right Name

Now keep in mind, in this example, the name “Grand River Land Company” is a fictitious name. It is not the legal name of the business entity, it's just the mask you can wear to showcase the selling side of your company to the outside world.

HOWEVER, when you buy a property, the actual business entity name “Summit Land Properties, LLC” would have to be listed on the deed as the Grantee (buyer). Likewise, when the property is sold, the Grantor (seller) would AGAIN be listed on the deed as “Summit Land Properties, LLC”.

When it comes to the signing of contracts or other legally binding documents of any kind, the “trade name” doesn't enter the picture.

As Wikipedia explains it,

Fictitious business names do not create legal entities in and of themselves; they are merely names assumed by existing persons or entities. Legal agreements such as contracts are normally made under the registered legal name of the business or owner, and the legal name must be used whenever a business sues or is being sued.

In other words – you would always use the legal business name (i.e. – Summit Land Properties, LLC) when filling out legal paperwork, making offers or signing contracts on behalf of your company. The only time you'll use the trade name (i.e. – “Grand River Land Company”) is to act as the brand name of your selling operation when you hold your company out to the public for that purpose.

Creating a Clear Separation

Remember, the whole point of this process is to have two completely separate platforms. One to handle the buying activity, and one to handle the selling activity.

When a seller lands on your buying website and submits their property information, there should be no feasible way for them to find your selling website. Likewise, when a buyer lands on your selling website to look at your properties listed for sale, they shouldn't find any links or references to your buying website or company name. There should be no way for the outside world to make the connection.

Both websites are set up on separate domain names, the look and feel of both sites is different, there are separate phone numbers listed on the Contact pages of each site, and whatever email service you use – you don't necessarily need to create multiple emails accounts, but you should have domain forwarding set up for both domains so that the “reply to” address references the domain where people are emailing you from.

When you segregate your business activity appropriately, you'll have a much more sustainable and healthy way to communicate with your buyers and sellers in a way that won't create any unnecessary conflicts of interest.

Join the discussion 31 Comments

  • Mini Schmidt says:

    Great article. The dba makes sense now. You made a complicated topic easy to understand.

    • Seth Williams says:

      Awesome! Thanks Mini. It actually took me a TON of time to try and simplify the concept – I’m glad it made sense to you.

  • Alan says:

    Seth,

    Great article. One thing I want to mention. I know there are some states—including Wisconsin if I am not mistaken—where you are legally required to disclose your legal name (e.g. LLC) somewhere on your website if that is the state you are incorporated in. For example the DBA as the name of the website for advertising , but the legal name in the footer or some other fine print on your site. I could be mistaken, but I have come across this requirement several times in Wisconsin.

    • Seth Williams says:

      Thanks for sharing Alan! I think I actually heard of a similar requirement in California – either way, it’s a good issue to be aware of.

  • Hays says:

    Great article, Seth. I’ve struggled with this for quite some time. Question: Are there any circumstances you can think of where you couldn’t have multiple brands tied to one LLC? I ask because I’m thinking about setting up multiple, location-specific DBAs.

    • Seth Williams says:

      Hi Hays – there may be some instance out there where it doesn’t make sense, but I’m probably not the best person to advise you on it. I have a handful of assumed names tied to my LLC (some of which I’ve never even used… I just thought they might come in handy some day) and it’s never been a problem for me, so as long as you aren’t depending on the separate protection from multiple LLCs, you can probably do as many as you want (but again, I’m no attorney – so don’t take my word for it :).

  • Daniel Bear says:

    Thank you for taking the time to break this concept down Seth. Your content is always so insightful and I look forward to implementing this technique shortly.

  • Patrick says:

    Hi Seth,

    Excellent article.

    I see in the above example that you have the buying arm of the business set up as the LLC and the selling arm as the trade name. Are there specific benefits to set it up that way or does it really matter which of the two arms are the LLC?

    • Seth Williams says:

      Hi Patrick – that’s a great question. Depending on what the names of your LLC and dba are (i.e. – what type of company they sound like), I think you could just as well set it up the other way around, with your LLC as the selling entity and your dba as the buying one. In fact, this actually how I have mind set up (because my LLC name sound more like a selling company than a buying company)… BUT if I could start over from scratch, I’d probably follow the structure outlined above, just because it makes more logical sense to me.

      Thanks for asking!

      • Patrick says:

        So why specifically would you set up the buying arm as the LLC if you were starting from scratch? Is there some kind of benefit to use the buying arm as the LLC?

        • Seth Williams says:

          In my mind, it makes more sense to use a dba for the “flashy” side of your business (i.e. – the selling side), because the whole point of most trade names is to sound better than the original name of the entity itself.

          Honestly though, it’s just a personal preference thing. You could do it either way and be fine – or you could also set up TWO dba’s, one for each side (and then you’d hardly even reference the name of your LLC outside of the signing of contracts).

  • Emily says:

    Hi Seth, We do the same; our company likes to operate in competitive niches and we have product specific websites for each niche.

  • Jesse says:

    Seth,

    When it comes to closing a deal wether buying or selling, is the payment made in the form of your LLC name or the DBA? So if I were to buy a property from you, who am I writing the money out to? Are you able to except money for example via checks in your DBA name?

    • Seth Williams says:

      Hi Jesse, if you want to keep it simple, the payment would be made to/from the name of your LLC (not your DBA). That being said – if your bank will allow you to receive payments made to the name of your dba, then you could just as well receive the money that way… as long as they’ll recognize the two names as synonymous, you should be okay (talk to them about what they’ll allow to be sure). The same goes for making payments, if they’ll allow you to put your dba name on the checks, then you could probably handle it that way too.

  • Patrick says:

    Great article Seth. When I created my LLC I created a name that would be a catch all for real estate as I thought I would work in a few niches. I have focused more on one niche and would be nice to brand it a little better. Anyway, why go through the process of creating a trade name with the state? If everything legally flows through your llc, shouldn’t just reserving the URL you want be as far as you go? Why can’t I just create a website and call myself by my new brand name? Why the extra formality of registering?
    Thanks

  • Rockroserealty says:

    it’s happen first time with me to understand any article easily due to “You made a complicated topic easy to understand”…. thanks for that Seth !!!

  • Bill Eisenhauer says:

    Can you talk a little bit about what makes a good buying name versus a good selling name?

    In your example for the buying name, I could actually see how that name could connote a selling name too (e.g. properties could imply properties available).

    So I’m wondering, if just identifying two brand names and keeping the respective messages focuses on buying versus selling is more important than the name itself. In looking at your examples, that’s what it seems like to me.

    I have a “properties” domain, but feel like it might be more appropriate for the selling brand.

    Any additional thoughts would be appreciated!

    • Seth Williams says:

      Hi Bill – good question. I think it’s one of those areas where it’s easy to overthink the issue to some extent (I know I certainly have). There probably is some validity to picking a name that is geared toward a specific function, but it’s usually not a “make-it-or-break-it” kind of thing.

      If I had to start over, I’d probably name my buying arm something that makes land sound undesirable (because I want people to sell their land for a very cheap price)… maybe something like “Dirt Buyers, LLC”. And then I’d make my selling name something that makes my properties sound great, because I want people to buy them… so maybe something like “Grand View Properties”.

      I think the word “properties” could be used either way – because in either case, it’s exactly what you’re dealing with (and it doesn’t necessarily have a positive or negative connotation – it just is what it is).

  • Patrick j says:

    Hi Seth,
    Im curious on what your buying website might look like. For instance, what does it consist of mainly. Im having trouBle visualizing the buying Website. I assume its mostly data fields that the visitor fills in such as their contact info etc… also, if someone like me is just starting out and doesnt have any properties To sell yet, do you recommend a selling website initially? If so, what do you think it should consist of? Side note; this comment box only allows caps typing and is randomly capitalizing certain letters… weird.

    • Seth Williams says:

      Hi Patrick – have you seen this blog post? The second video might give you some ideas on what pages to include in your buying website (though these are just some ideas, you don’t have to follow this exact same model).

      If you’re focusing on just one website in the beginning, I would probably recommend the buying website until you have something to sell… at that point, a selling website is pretty easy to set up.

  • Tom says:

    Hi Seth,
    This is a related question – if I have seperate LLC’s set up for buying and selling, when I purchase a property, how would I transfer that ownership over to the other LLC so that I could sell it? I’m assuming there’s some paperwork and cost involved? In that case, it would make more sense to have an LLC and a DBA, so the ownership of the property stays consistent, correct?

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