Can a land flipper or homebuilder spend all profits on land to be held as inventory?

[Jay Matthew]

I'm new to business and seeking some clarity before consulting an advisor. Could a land flipping business or homebuilder (sole proprietor LLC) spend all profits on land to be held as inventory? Any and all advice is greatly appreciated.

$100,000 company profit

$(40,000) company expenses

$(60,000) new inventory (land for resale or development )

$0.00 profit

[David M.]

@Jay Matthew

regardless....  Profit is sales proceeds less the cost basis (basically the purchase price).  So, what you are doing there has been thought of many times by people --- I honestly don't know why.  "Reinvesting the profit" or whatever you call this doesn't eliminate the profit.

Good luck.