After starting, flopping, succeeding, flopping, succeeding, starting.... Several businesses in Michigan over the last eight years - I believe I have the scars to be able to say without a doubt that unless you have made a first sale in your business, whatever the business may be, you don't have a business till you get THE FIRST CHECK with your LLC name on it.
You don't have a business when you buy a foreclosure: you have a business when you flip it, or rent it, or lease-option it or wholesale it.
So many entrepreneurs forget the most basic lesson. It is not about looking at houses or buying them or fixing them. It is ONLY when you get a check because of that house when your LLC becomes a business.
It is about the FIRST SALE.
Always was. Always will be.
If you can do one. You can do ten more.
If you can get one check with your name on it, you can get 9 more.
So today, during lunch break or driving to an appointment, think about what can you do to get a first check for your newly minted LLC before the month ends?
You're absolutely right, Mark. Even the IRS distinguishes between what a business is and what a hobby is. If you aren't earning money, basically you're a hobby and they will disallow all of your write-offs (and you don't want that if you're doing a $25,000 rehab). So on top of sitting on a dormant property and all of the expenses that come along with it (mortgage, upkeep, repairs, etc.), now you're stuck with all of the rehab expenses! Some hobby, huh? On the other hand, buy right, sell or rent right, and everything else will just fall into place for you.