Types of Real Estate Businesses

As a real estate professional, you can buy, sell, broker, and rent various types of properties. It’s up to you, which real estate business model you choose for yourself.

  • Rental business model
  • Residential properties
  • Commercial properties
  • Online property listing
  • Property management services
  • Resorts and vacation homes
  • Income properties purchased for renting or leasing

Regardless of the type of properties and business model you choose, the best way to get started is to register your business as a legal entity.

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Real Estate Startup Essentials You Need

Starting a real estate business isn’t for the faint of heart. Do you have what it takes to start, build, and grow a profitable business in the real estate industry?

If you are ready for all the hard work and persistence, starting a real estate business can give you the seven-figure income of your dreams.

Here are a few real estate business essentials you need to get started:

Create a Business Plan

If you want to outperform an average real estate agent, you need to think like a business owner, which requires planning.

  • Identify the nature of your business. Buy and sell? Or, rent?
  • Conduct market research to find out the cost of buying, selling, and renting residential and commercial properties.
  • Arrange business financing through communities such as the US Small Business Administration (SBA).
  • Study what other real estate companies are doing.
  • Create a marketing and sales plan to find prospects and nurture leads.
  • Build long-term customer relationships.

Fulfill Real Estate Licensing Requirements

To start a real estate LLC, you need to acquire a real estate license.

The cost, eligibility, and timeline of getting your license vary from state to state so consult with local authorities to understand the licensing requirements.

  • Take pre-licensing courses.
  • Clear your state licensing examination.
  • File a real estate licensing application.
  • Acquire your license.

Find a Real Estate Brokerage to Gain Experience

You have got your license. Great!

However, that might not mean you can start selling properties right away.

Most states require you to work with a real estate broker for two-to-three years as an agent before you can set up your own business.

  • Choose to work with a national franchise like Keller Williams Realty.
  • Apply for work at local real estate brokerages/agencies in your area.
  • Join a virtual brokerage.

Form a Real Estate LLC or Corporation

Starting a real estate business comes with huge risks, which is why it’s important to form a legal entity that provides personal liability protection.

Most real estate professionals either incorporate or form an LLC to start their businesses to get:

  • Personal Liability Protection
  • Tax Benefits
  • Credible Legal Structure
  • Business Bank Account
  • Easy Capital Investment

While incorporating is a more complicated process, it is easier to form a real estate LLC. LLCs offer minimal compliance and greater control over business decisions, which makes them one of the best entity types for real estate companies.

Fill out one, simplified application and our experts will take care of the paperwork and filing process for you.

How to Form a Real Estate LLC to Start Your Business

If you want to take the plunge and start your own real estate company instead of working for others, there is a lot to consider and do.

Let us walk you through the steps you need to follow to establish a company, fulfill legal requirements, find clients, and make real estate sales.

Here is the step-by-step process to form a real estate LLC:

Step 1

Plan, Plan, and Plan

Just like any other business, opening a real estate company requires planning. You need to set goals and a direction for your business. Find investors or lenders. Choose whether you want to sell, rent, broker, or manage properties. Create a plan for everything.

Step 2

Arrange Funds for Your Real Estate LLC

Starting your business as a broker might not require too much money but investing in properties yourself does. Even if you only manage others’ properties, you will need funds for the operational costs of your business.

You can get small business loans from banks and other financial institutions for the same.

Step 3

Get Real Estate Licenses

To form a real estate company, you will need to fulfill the licensing requirements in your state. Connect with local authorities to learn about the eligibility criteria, fees, and process of acquiring a license if you want to work as a broker.

Step 4

Understand the Benefits of Forming an LLC

LLCs are easier to form than Corporations. They protect you from personal liability, offer management flexibility, and allow pass-through taxation. In all, forming an LLC is one of the best choices for real estate contractors, brokers, and agents.

If you want to opt for a more robust business structure, you can consider incorporating it as well.

Step 5

Complete State and Federal Filings

To form an LLC, you need to file Articles of Organization and create an LLC Operating Agreement to define the roles and responsibilities of each of the members. You’ll also need to acquire an Employer Identification Number (EIN)/Tax ID from the IRS.

GovDocFiling allows you to complete both filing processes by filling out one, simplified application. Let us help you form your real estate company LLC.

Step 6

Open a Business Bank Account

Make sure that you open a business bank account to separate your real estate business finances from personal finances. This will make it easier for you to track, manage, and report business expenses and profits for taxation purposes.

Step 7

Build a Strong Online Presence of Your Company

This is the age of digital media, which makes it crucial for businesses to build a web presence. You should buy a domain name and build your own real estate website for online listing.

Also, create social media profiles for your business to reach, attract, and engage potential clients.

Step 8

Create a Consistent Marketing Plan

Whether or not you’re getting many referral clients, there is one thing you should never stop doing. And, that’s marketing. A consistent marketing plan which uses a unique value proposition will help you reach potential clients and convert them into regular customers.

Step 9

Focus on Customer Relationship Management

If you want your business to turn profitable, you should focus on nurturing leads and building long-term relationships with your customers. Many companies also leverage CRM systems to organize contacts and keep track of all conversations, which helps them deliver better customer experiences.

How to Form a Real Estate LLC to Start Your Business

If you want to take the plunge and start your own real estate company instead of working for others, there is a lot to consider and do.

Let us walk you through the steps you need to follow to establish a company, fulfill legal requirements, find clients, and make real estate sales.

Here is the step-by-step process to form a real estate LLC:

Are you ready to start your entrepreneurial journey in the real estate industry?

Then, what are you waiting for? Complete your state and federal filings online with our simplified application and leave the rest to us

Form Your Real Estate LLC Now

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Why Choose GovDocFiling to Form Your Real Estate LLC?

We are entrepreneurs ourselves. We’ve been where you are standing today, which is why we understand how confusing the startup phase can be for first-time entrepreneurs.

We have got the expertise you need for a hassle-free filing process and correctly done paperwork.

Leveraging our service offers many benefits, such as:

Take the first step towards pursuing your passion and becoming your own boss.

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Frequently Asked Questions

What is an example of a tax ID number?

A federal Tax ID Number is an identification number used by the Internal Revenue Service (IRS) to administer tax laws. This number is issued either by the IRS or Social Security Administration (SSA). A business Tax ID number is required on tax return forms.

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How do I get an EIN application?

An Employer Identification Number is a nine-digit number that identifies your business. It works much the same way your social security number does. If your company has employees, is a corporation or partnership, has a Keogh Plan or fits one of several other situations, it must have its own EIN.

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How many EIN numbers can I have?

As a business owner, you probably know your company needs an EIN (or Tax ID Number) issued by the IRS for tax purposes. But what if you own multiple businesses or operate different divisions of the same entity?

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What is the purpose of a tax ID number?

Your business is going to need to file income taxes. The Internal Revenue Service uses Tax Identification Numbers to distinguish between individuals, business, and nonprofit organizations, but business tax ID numbers should be distinct from your personal federal tax ID number.

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What does it mean to have a tax ID number?

For the IRS to conduct its business, it must have an easy way to identify each individual and business. To do this, they require each individual and business to have a tax ID number.

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How does an SSN differ from a tax ID?

A social security number (SSN) is a tax code used by an individual, while a tax ID is a nine-digit tax code for a business entity. For a business entity, a tax ID is usually called an EIN.

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What is a DBA?

If you’ve ever considered working for yourself, or starting your own business, you may have wondered: what is a DBA? Is a fictitious business name the same as a DBA? What are the benefits of a DBA to my business and myself?

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Can a DBA be filed for all business types?

Each type of business entity has clear advantages and disadvantages. Can a DBA be filed for all business types? In most cases, yes; but understanding what a DBA is and what it’s limitations are will help you decide if it’s worth

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How many DBA names can I register?

DBA application filing is a process overseen by state DBA laws and local government, protecting the public from nefarious business owners. DBA is an abbreviation for “doing business as,” and is also referred to as a fictitious name or trade name.

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Do I need a DBA?

If you’ve ever considered freelancing, or starting your own business, you should take a few moments to answer this very important question: Do I need a DBA? Not every small business owner needs to pursue DBA application filing, but

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Are any words prohibited in a DBA name?

DBA is an acronym that stands for “doing business as.” You may be wondering “do I need a DBA?” If you intend to do business using a name other than your legal business name, you need a DBA. DBAs are common for sole proprietors or partnerships that do not want to use the owners’ legal names to do business.

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If you’re starting a business, there are more then a few abbreviations you’ll need to remember. Filing a DBA application, or applying for an EIN, are two common steps for new business owners. However, they are not the same thing, and as a business owner you should know the difference.

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What is an LLC?

A limited liability company, commonly referred to as an LLC, combines the taxation benefits of a partnership with the limited liability of a corporation. Instead of partners, LLC business owners are called members, and there can be several, or a single member.

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What are the benefits to filing for an EIN as an LLC?

A limited liability corporation is one in which the members aren’t personally responsible for any company liabilities or debt. Limited liabilities have the protections of a corporation but the flexibility of a partnership. If your business is listed as a limited liability corporation, you can benefit further by applying for an Employer Identification Number.

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What’s the difference between an LLC and a corporation?

The fine print that separates a limited liability company (LLC) from a corporation can be overwhelming for new business owners or entrepreneurs. While the minutia of these details might be best suited for a legal advisor or accountant, the broad differences are fairly easy to understand, and they might be enough to help you make a judgment

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What happens if I apply for the wrong LLC?

Limited Liability Companies (LLC) are popular business structures because they offer personal liability protection for members and don’t have all the formalities that corporations do. LLCs also enjoy pass-through taxation, which means the company doesn’t pay federal income taxes; instead,

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What legal documents do I need to start an LLC?

For entrepreneurs thinking about starting their own business, forming an LLC is an ideal option, as such an entity provides the owners protection from lawsuits, business debts and other business indiscretions. However, in order to obtain that protection, there are a number of documents that the business owner or owners must file with the state government prior to conducting business.

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What are the differences between a partnership and a Limited Liability Company?

A Limited Liability Company is a legal entity all its own, while a partnership is owned by two or more people who share legal responsibility of the business entity. In a partnership, the business does not possess a legal identity outside of the business owners. A Limited Liability Company offers more flexibility in terms of operations and personal asset protection.

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What is a C-Corporation?

A C-Corporation is just anther way of saying corporation. It means the same thing. Corporations are incorporated business entities that file Articles of Incorporation with the Secretary of State or a similar government agency.

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Can a C-Corp have multiple owners?

There are certain C-Corp requirements to meet whether you want to start a corporation with one shareholder or dozens. It is certainly possible to apply for a C-Corporation EIN with multiple owners, and when forming a C-Corp in this manner, there are a few points to keep in mind.

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Why is a C-Corp taxed differently than an LLC or S-Corp?

Unlike other business structures, C-Corp taxation is significant in that corporations are taxable entities. Corporations are taxed like an individual and contribute according to corporate income, and then again on shareholder tax returns. This is commonly called ‘double taxation’.

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What is an S-Corp?

S-Corporations, sometimes called S-Corps, can be useful ways for business owners to avoid what’s called “double taxation”, while also protecting shareholder assets from personal liability. It’s a mix of advantages drawn from other types of business entities; and it isn’t nearly as complicated or time consuming as you might think to establish.

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How do I file to become an S-Corporation?

Before we dive into how to file to become an S-corporation, let’s take a look at what an S-corporation is, exactly, and why you may want to establish this type of business entity for your company. S-corporations are similar to partnerships, or sole proprietorships, at least in terms of how the company will affect you financially.

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What is a disqualified S-Corporation?

There’s No Such Thing as a Disqualified S Corporation. Luckily, S corporation disqualification is more of an urban legend than fact. In 2010, Congress attempted to pass a measure that would have disqualified some S corporations, primarily small businesses, from using S corp tax structures when filing.

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Forming a Real Estate LLC? Let Us Help You Get Started

GovDocFiling’s business formation experts understand what it takes to form a company and know which mistakes to avoid.

Let us handle the complicated paperwork and filing processes for you while you focus on other important aspects of starting a real estate business.

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Choose Your Business Entity Type to Get Started

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Explore the Entity Types

Click on the links below to learn more about the taxation rules and benefits of each entity type.