3 Quick Actions to Start Your Business Right

3 Quick ActionsMost aspiring entrepreneurs have big dreams about their new venture. They know exactly where they want to go, but they have no idea where to start.

It’s an understandable dilemma. Back when I started my real estate investing business, I remember having some pretty huge ambitions, but no tangible direction on how to actually take that first step.

What I found in my first year was that there were a few key pieces of “business infrastructure” that simply had to be in place in order for my little company to function the right way (and this infrastructure applies to almost any type of work-at-home, “solopreneur” business).

Lucky for you and me – it’s fairly easy to implement things and they all play an important role in protecting our personal interests and helping our businesses to function seamlessly, day in and day out.

We’re into real estate investing. We’re also into keeping it real.

Some of the links in this article help to financially support this website, but the real-world guidance is all REtipster.

1. Setting Up Your Business Entity

There are several reasons why it’s important to set up an actual business entity for your company rather than acting as a “sole proprietorship” (a set up that offers virtually no tax advantages or personal liability protection).

Most real estate investors (myself included) run their businesses in the name of an LLC, aka – Limited Liability Company, and there are a few reasons why:

  1. An LLC offers instant credibility with many of your customers.
  2. An LLC can protect your personal assets against legal action.
  3. An LLC has tax advantages that allow your business profits & losses to pass through to your personal tax return (whereas most other corporations are double-taxed).

corporationThere’s actually a lot more to it than just these 3 advantages (I’m hardly even scraping the surface here). When I was first trying to familiarize myself with the different types of legal entities and what each of them was designed to do, I was able to get a VERY good overview of it from this book (just be sure to drink plenty of coffee before you get started).

If you’d like to set up a new LLC for yourself, you can do it manually in most states through your state website OR you can try a more user-friendly option like Rocket Lawyer.

In most cases, it will make sense to form your business entity in the state that you plan to do business in – but don’t take my word for it. If you have questions about how this process works (or if you just want someone to handle the entire process for you), just talk to a qualified attorney in your area. It will cost more to go this route, but sometimes it’s worth the money to know that it’s being done right.

Here’s a quick overview of how to do it:

Get Started with Rocket Lawyer!

As with anything, when it comes to incorporating your business, there is more than one way to skin a cat. I’m not saying you need to use a service like Rocket Lawyer, it just happens to be a vehicle that makes the process very easy and inexpensive.

REtipster provides real estate guidance — not legal advice.

The information in this article can be impacted by regional legislation and other unique variables. For the real deal, always consult with a qualified legal professional before taking action.

If this tutorial looks like something you can do – then feel free to give it a shot!

2. Setting Up Your Business Phone Number & Voicemail System

If you’re running your business like I am, you’re going to come in contact with a lot of people over the course of a year. Buyers, Sellers, Vendors, Contractors, the list goes on…

Unless you want to open up your personal life to strangers who don’t belong there, you need to take a few steps to segregate your business lines of communication from your personal life. There needs to be some very clear boundaries on who can and can’t reach you at certain hours of the day and certain days of the week – and you can set up some of these boundaries with a cloud-based phone service.

I’ve used RingCentral for the past 6 years and it has worked pretty well for me, but there are several other options out there if you do some searching.

I know some folks who have tried to rely on free phone services like Google Voice.  I’m not saying this can’t work – but in my experience, I’ve found that these free services just don’t have the same kind of customization settings (including toll-free numbers and faxing capabilities) that will get the job done.

I use two different 888 numbers in my RingCentral account – one for the buying arm of my business and one for the selling arm of my business. This kind of setup is completely optional (you could just as well use one local number for everything), but I’ve found that separate, toll-free numbers are helpful in controlling the flow of communication to & from my business and projection the right image to my callers, depending on why they’re calling me in the first place.

If you choose a paid service, be sure to record your greeting(s), create some extensions and set up the answering rules (i.e. – when you’re “open for business” and when you’re willing to accept calls). The ability to set up these kinds of rules is a HUGE luxury. It will take some time to do it the first time – but you only have to do it once and believe me, it’s worth the effort on the front end. If you aren’t sure how to do this – I’ll show you how to handle this in just a few minutes on RingCentral…

Get Started with RingCentral!

3. Setting Up Your Business Mailing Address

Almost every week, I’m reminded of how important it is to have a business mailing address that is separate from my home address.

For the same reason, I don’t want strangers calling me when I’m not working, I also don’t want strangers showing up at my house for any reason – EVER.

If you’re planning to send out a direct mail campaign to thousands of people, ask customers to send you monthly payments in the mail or make a contractual offer to anyone (all of which require you to provide your physical mailing address), you’ll have some even stronger reasons to take this step.

Luckily, it’s not difficult to set up a different physical location (separate from your primary residence) at which you can receive your mail. You can do this by renting a mailbox at any local shipping and receiving storefront like Pak Mail, the UPS Store or even your local Post Office.

I’d suggest you find the most convenient location that you’re likely to drive by on a weekly basis and simply rent one of their mailboxes. You’ll have to pay a monthly or annual fee for this (I currently pay $144 per year for mine) – but the cost will be 100% worth the value you get from it.

If you want to take this kind of remote mailbox to the next level, you could even go with a “virtual mailbox” service like Earth Class MailiPostal1  or Traveling Mailbox. With services like these, you can get everything scanned to you electronically without ever leaving your computer.

Cool Trick: If you choose one of the storefront options like Pak Mail or the UPS Store, you can refer to your mailbox as a “Suite”, “Unit” or “Apt”, as long as you include the number of your mailbox (this will make you look WAY more legit).

For example, if I rent box #604 at my local UPS Store, my address could look like this:

1234 Manhattan Drive, Suite 604
New York, NY 10458

Little do my contacts know – if they ever come looking for my “Suite”, this is what they’re going to find:

Believe it or not – I’ve had more than one occasion where various individuals have shown up, in person, at my business mailing address (i.e. – my local Pak Mail store) looking for me.

Luckily, this whole system is designed to give business owners like myself privacy (because the good folks at Pak Mail aren’t allowed to give out my real location). Of course, these kinds of visitors are rare – but as you can imagine, this kind of “veil of protection” is still a huge benefit!

Another side benefit of these storefront mailboxes is that if anyone ever needs to deliver a package or envelope to me that requires a “sign off” as proof of receipt – the store employees can do this on my behalf. It’s almost like having a free secretary to act as the gatekeeper for anyone trying to reach me or deliver something to my business mailing address, and this can be a major value-added service that is absolutely worth paying for.

Conclusion

Keep in mind – even though these are some very good investments to make as you’re getting started, it is entirely possible for you to earn your first dollar before you have these things in place (in fact, I’d be willing to bet that most new businesses get started without them).

I would definitely recommend these steps for any new entrepreneur, but not at the expense of inaction. If you’re can’t do it all today, don’t let it hold you back from getting started. The point is NOT to give you a list of obstacles to overcome before your first transaction. The point is to give you a clear idea of what the basic infrastructure for most work-at-home businesses should look like (especially if you’re serious about growing and making money).

If you’re starting out on a shoestring budget like most of us do – don’t feel like you NEED to pay for all of these things before you can do your first deal. Just keep them near the forefront of your mind and try to nail them down with the first few dollars you make from your new business.

The Best Real Estate Investing Strategy I’ve Found

I'll be completely honest with you. The most powerful strategy I've used to build my real estate investing career is probably NOT what you might guess.

Land investing (that's right, buying and selling vacant land) is a massive opportunity that most investors aren't paying attention to. For the few land investors who know how to pursue this business with the right acquisition strategy, it's an extremely lucrative and low-risk way to build serious wealth from real estate.

If you want to get the inside scoop on how to start and run your own land investing business, come and check out the REtipster Club – where I've put together a full 12-module course with dozens of videos, bonuses, downloads, group coaching sessions and a members-only forum (where we spend time answering questions every week). There is no better place to learn this business from the inside out!

About the author

Seth Williams is a land investor and residential income property owner, with hundreds of closed transactions and nearly a decade of experience in the commercial real estate banking industry. He is also the Founder of REtipster.com - a real estate investing blog that offers real world guidance for part-time real estate investors.

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  1. Mark Podolsky says:

    Seth,

    Such a great article! I have two more tools I’d like to add–
    Just came across this one recently: http://www.sweetprocess.com- this site helps you create processes for your VA’s, employees, etc. and also helps you crystallize your work flow into not getting side-tracked. I love it and free to start.
    The other tool I’m really loving for my international students is http://www.virtualpostmail.com. This is like having your own U.S. address, but getting all your mail sent to you via email. Phenomenal way for international investors to have a U.S. Presence very inexpensively!

    1. Seth Williams says:

      Whoa! Those sound like some awesome resources Mark – thanks so much for sharing!

  2. Joshua Clark says:

    Another great article, Seth. Thanks for the wisdom!

    1. Seth Williams says:

      Absolutely, thanks for reading Joshua!

  3. Josh says:

    Seth, did you set up a different LLC for your buying arm and your selling arm? Or are they run under the same LLC using different DBA? Or something else?

    Thanks for all the free value you provide on this site, it’s amazing.

    1. Seth Williams says:

      Hi Josh, great question (I used to wonder about the best way to handle this too).

      I have one LLC that handles both the buying and the selling – but for the buying arm, I have an assumed name (dba), which basically just means it’s the same company, but the website/logo/business cards/everything else goes by the assumed name.

      For example – my actual entity name could be Sierra Properties, LLC – with an assumed name of Sierra Properties, LLC dba “Summit Land Buyers” (so my buying website would be called Summit Land Buyers, and my selling website would be called Sierra Properties, LLC). Does that make sense?

      1. Josh says:

        Makes total sense! Brilliant!

        You mentioned using different phone numbers for each arm, but if you are putting your contact information on each site, do you ever worry if someone will search the incorporation address (same) and connect the dots? Or is that expecting way too much of our buyers/sellers? And would it even matter if they did?

        Thanks again!

        1. Seth Williams says:

          I’m always very careful not to cross-reference the two entities (on the buying side, I wouldn’t say “Sierra Properties, LLC dba Summit Land Buyers” – I would just use “Summit Land Buyers” without making any reference to the actual LLC name (this is what you’re allowed to do with an assumed name and it’s part of why people create them).

          The only similarity would probably be the mailing address – but honestly, I can’t think of any time when someone has searched and made the connection based solely on that (most of these people have no reason to look further, because they don’t realize what you’re doing with the other arm of your business).

          1. Josh says:

            Again, makes total sense, and thank you so much for your reply!

            Last question – I’m not sure I understand the importance of keeping the two arms separate. What challenges might one face from one side seeing the other?

  4. Josh says:

    I bought the Rich Dad “Start Your Own Corporation” book. Great, DENSE book explaining different entities. I have a question:

    If I register an entity in one state, and flip a piece of property in another state, do I have to register with that state for tax purposes? Am I considered to be “doing business” in that state? Or can I just keep it within the filing I have in state for my LLC or S-Corp?

    Thanks!

    1. Seth Williams says:

      Hi Josh – nice job slogging through that book. It’s definitely dense, but equally important stuff to understand about business entities.

      My understanding is that if you’re going to do business in another state, you need to register as a foreign entity doing business in that state (for this reason, I don’t usually pursue deals in other states intentionally unless I plan on doing A LOT of stuff there – because it’s just a hassle).

      Alternatively, if you invest using a self directed Roth IRA, you get side-step this process altogether (because it’s a non-taxable entity). Using a self-directed Roth IRA is a whole other ball of wax, but it might be worth considering if you’re planning to do business all over the place on a regular basis.

      1. Yasir Lillingston says:

        Hello Seth,

        Very insightful as always. Thanks for the great information.

        A quick question. You mention that you try no to pursue deals in other states unless you plan on doing a lot of transactions there. Does that mean that you deal mainly on a single state then?

        I’m just starting and don’t have an LLC yet. Plan on doing it once I have a couple of deals ($$$) under my belt. So just wondering if establishing and LLC in any given state, will limit my ability to purse deals in other states.

        I understand that I need to discuss with a CPA/layer when time comes but your opinion is appreciated.

        Thanks a lot for the insight.

        1. Seth Williams says:

          Hi Yasir, if you’re planning to do business in multiple states in the name of your LLC – you’ll want to register as a foreign corporation in each of those states (which can be a bit of a hassle). In these cases, I try to buy properties in my personal name or in the name of my Self-Directed Roth IRA… it’s just one less annoyance to deal with in the process.

  5. rishitha says:

    Thanks for the information! I also had my own bussiness to publish for the real estate sector.

  6. DAVID says:

    Seth,

    How would you get started with a mailing campaign without a proper business entity (LLC)?
    Or a phone number/website/mailing address so that potential sellers could reach you?

    1. Seth Williams says:

      Hi David. Personally, I wouldn’t get started on a mailing campaign without first having and LLC, a dedicated phone number and a mailing address (separate from my home address).

      I think the website can come later in the process, but the LLC, phone number and mailing address are all crucial components when starting out.

      1. David says:

        Thank you Seth!
        Do you have separate phone numbers and mailing addresses for the selling (LLC) and buying (dba)?

        1. Seth Williams says:

          Hi David – I do have separate phone numbers, but not a separate address.

  7. Wayne says:

    Would it make sense to create a buying or selling website that doesnt reference your LLC name?
    For instance, if your company is ABC, LLC dba “123 Properties”. And you have a buying website webuyproperties.com and a selling website getyourhome.com. Would that be ideal?

    1. Seth Williams says:

      Hi Wayne, I think so. That’s actually the exact way I have my websites set up. I try to keep them separate from each other as much as possible (different names, different numbers, different URLs, different everything).

  8. Adam Lucas says:

    It’s not such a bad idea if you have no place to receive business mail. My business is very small and I was looking for solutions for this problem and then I found out about postscan mail and i tried the service for free. I really see no problem. It’s legal; they don’t handle mail without a postal consent form. Never had any issues. Would recommend postscan mail to anyone.

    1. Seth Williams says:

      That’s good to know Adam, I hadn’t heard of postscan before. I’ll have to check them out!

  9. Deocto Enterprises says:

    I’m at the point now where I need to incorporate, and am nearly frozen with fear. I’ve read swaths of “Incorporate & Grow Rich” and have attended several small business meetings put on by a local non profit and the SBA as well as a consult with a mentor, (though he frustratingly didn’t specialize in RE).

    The number one piece of advice I seem to get is get a CPA and an attorney. Outside of an hourly consult, I don’t want to spend the cash just yet to do so.

    I can incorporate myself in my state with all the filings for under 300 bucks. I’m just paralyzed by the possibility that I’ll tic the wrong box , that someone will show up @ my door (not allowed to use PO Boxes for LLC), or by aspects I don’t quite understand (eg choosing a registered business agent).

    Should I just jump in?

  10. Matt Snow says:

    Hi Seth,

    First of all, thank you so much for posting such quality information on your blog, it has been a HUGE inspiration with getting started.

    Quick question: After an owner accepts your offer, and you are in the process of closing, whether by mail or in person, do you use your buying-arm phone number or LLC phone number on the closing documents? Just thinking it might be awkward if they have to listen to a lengthy message before getting a hold of you even after they have accepted, but at the same time, it still might not make sense to cross-reference the two at that point. Any thoughts?

    1. Seth Williams says:

      Hey Matt – absolutely! Thanks for the comment, I’m glad you’ve found it helpful.

      As for the phone number issue, I have several different numbers I used for different purposes. For instance, I have one 888 number that I used for my voicemail screening message, and a separate local number that I use as more of a “general line” when people need to get a hold of me (whether it’s for the purpose of buying one of my properties or selling their property to me). When I’m in the closing process, I give people this general number (with a specific extension) so they can get a hold of me that way, without having to listen to a 2 minute voicemail message.

      Does that make sense?

      1. Matt Snow says:

        That makes perfect sense. It will be nice to see the flow of things after having done a couple transactions. Thank you so much for your help!
        -Matt

  11. Dreams Onella says:

    This is extremely enlightening blog

  12. Thank You for sharing such a good and informative post with us all. I really appreciate your work.

    1. Thanks for reading Sachin!

  13. Gary Astrow says:

    Hi Seth,
    I just stumbled across your website and find your no nonsense simple way of explaining things extremely helpful, and have subscribed. I am brand spanking new to all of this but want to get started in wholesaling first before I jump into anything else. I’ve been doing A LOT of research over the last few weeks on finding motivated sellers, buyers, where/how to get the proper info, county records, free public info, etc., etc. and want to get started. i don’t have a website (yet) and i don’t have much $$ (out of work) which is one reason this attracts me. I have always been interested in real estate investing.

    I’m positive you have been asked this multi billion times BUT what’s the best place for someone like me to actually kick this off the ground and start making some money??Where do I begin??

    1. Hi Gary, thanks for the comment! That’s a pretty broad question (because it depends on what kind of strategy you want to use, among other things), but for many, the first step is to find motivated sellers, figure out how to contact them and make offers that are basically guaranteed to put you in a position where you can make money. Here are some blog posts that explain some of that:

      https://retipster.com/findingmotivatedsellers1
      https://retipster.com/findingmotivatedsellers2
      https://retipster.com/findingmotivatedsellers3

      https://retipster.com/land-flipping-lifecycle (this is a helpful one if you’re interested in the land business, specifically)

      https://retipster.com/real-estate-investors-quick-start-action-guide

      I hope those help!

      Seth

      1. Mary Smith says:

        Hey Seth, one more good source for changing USPS Address Change and Mail Forwarding with a few click of mouse.
        http://changethepostaladdress.com/

        1. Cool! Never heard of that – I’ll have to check it out. Thanks for sharing!

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