Taxes and Wholesaling

[Drew Beard]

Hello,

New to the BP forum. My wife and I are just getting into the real estate investing world and are trying to figure out what niche we should really focus on.

My wife is a real estate agent and I have worked in construction for quite some time now, so it makes sense to us to be a flip team. But we are interested in owning rentals as well, and possibly getting into wholesaling.

Could anyone give me some info about capital gains tax and any taxes involved with wholesaling? Our understanding with capital gains is that unless you occupy a home for two out of five years you will be taxed a pretty high percentage of what you have earned, so if this is true it seems wholesaling wouldn’t be worth the hassle unless you found a killer deal.

If anyone has any insight on how taxes relate to wholesale, it would be much appreciated.

Thanks!

[Rick Pozos]

I think you are worrying what color Ferrari to buy when you have not won the Lottery yet.

FIND some deals and make some money first. So what if you pay 22% or 30% or even 35%. If you are buying properties right, you are going to make tons of money. The trick is to buy the properties at the right price from the right people. This probably does NOT mean buying them on the MLS. You have to market to people who are distressed to get the great deals.

Get in a habit of making money from the properties that you buy and THEN start to worry about the tax implications. You are going to be so worried about the pennies that the dollars are going to go right past you!!! Focus on finding GREAT DEALS.