Introduction and some questions

Introduction and some questions

Orlando, FL · Member since 2016 · 1 post · 0 votes

I am new to Bigger Pockets. I have been listening to the podcast whenever I'm driving and find it extremely helpful.

I am small business owner in the service industry with 5-6 employees. Slowly getting burned and ready to move onto something else.

Even though the business itself does not take up too much of my time as I am a huge fan of creating systems, it is quite stressful due to employee turnover and the never-ending race to have quality employees to service our customers.

The way I see it I can keep churning on and start investing in RE on the side and keep the business and its cash flow until I see some money coming in from REI, or sell the business for $150-200K and use that money for funding more deals.

I have read most Rich Dad Poor Dad books, The 4-hour workweek, The E-Myth Revisited and have listened to dozens of episodes of BP podcasts. I am a numbers guy and enjoy building spreadsheets on my businesses. Most people find that boring but I live on numbers and analyzing is one of my strongest thing. 

I see myself gradually building a portfolio of rental homes and multifamily down the road and doing some flips and wholesaling to generate some extra revenue.

I would say that I have a good understanding of the process and I enjoy listening to podcasts to learn even more. I have been doing all this quietly without any networking, at my own pace.

I do have a few questions:

1) If I sell my business and pocket the money then I have to pay taxes on it. Is it possible to instead reinvest that money into this new business of Real Estate Investment without having to pay taxes?

2) Is there a section of the site where I can find sample contracts for 

- putting a house under contract with an assign clause

- contract for a seller financing purchase

3) I'd like to see opinions on selling business first and start full time or start on the side and sell after. :)

Thank you!

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    9y

    Welcome @Kevin Hart,

    1) If the business owns real estate, there are 1031 exchanges. 

    3) Start on the side and sell later may be easier from the perspective of obtaining financing. Everyone knows that for self-employed, lender income calculations are primarily based on tax returns. What not everyone is aware of is that the underwriting department is in the background on Google a few days before the loan funds, confirming and documenting that the business is, in fact, still in business. 

  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    9y

    Chris answered 1 & 3,  I agree and think doing real estate on the side is the best idea. 

    regarding #2 yes, the "FilePlace" under the tools tab above. Some of these contracts are frankly not very good. I would run them by and attorney and have him explain them. Contracts are important and you should understand any one you sign.

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