All Forum Posts by: Alex S.

@Greg Scott actually thought about selling and I don't want any of the proceeds, but the mortgage I am paying is lower than the rent I would be paying for her. Right now she is not working, that is what lead to being behind. There is about 120K worth of equity, but she would not be able to buy another house with that. With me paying the mortgage, I can make sure that she always have a place to stay. The hard truth is unless something unexpected happens (such as her winning the lottery), I will have to help her financially. Parents should not put their kids in this position, I am actually upset about it, but then again I am thankful that I am in a position to help. Just want title in my name to secure every dime I am spending, but don't want to get bit by gift taxes when she is actually receiving the gift.

@Ashish Acharya thanks for reply! Could you explain why most likely there would be no gift tax and would I still be required to file form 709? Thanks

In 2008 I purchased my mother a house. In March I found out she was facing foreclosure. She didn't want to tell me, because she knew I gave her the house to live in and not borrow money against. So anyway I paid the mortgage and late fees, from Jan to March and since March I have been paying the mortgage.

I told her I would put house in my name and pay the mortgage every month until I can just completely pay off (right now I am not able to do ). I want title in my name so that she can't borrow anything on it and to protect my interest since I am paying every month and will pay off mortgage. After paying off, I will continue to let her live there (paying me nothing).  BUT I just found out if I do a quitclaim deed then I will have to pay gift tax. I don't see this as a gift, as I am not making one dime. Yes the house has equity, but I am not touching or making a profit, actually, I am paying the mortgage, which to be honest I'm not happy about.

Is there any way I can avoid gift tax? I do have an s-corp for my flipping, but don't think that would be a good idea, because one day (hopefully no time soon) upon my mother's passing, I will turn it into a rental and don't want rental into my s-corp. Thought about opening a new LLC and putting in name of LLC, but my accountant said she didn't think that would work, because I would still own it. By the way my accountant has no sound advice to give. She said she will do some research, but is not familiar with this or gift taxes.

Are there any other options or strategies out there? Or maybe I'm missing something. I guess I could do a subject to, but even at that, I guess it would still be considered a gift since no funds are being transferred. This is tricky.

 You're right! Once you know codes you'll realize how easy it is to challenge them. I now keep the book in my truck. Just last month at final, senior inspector tried to fail me for not having tempered windows in bathroom, but code also actually allows laminated glass. You should have seen the look on his face when I opened the book and read it to him, priceless. He didn't realize the code also allows laminated glass.

From a licensed contractor to another..

1) You're a GC, not a handyman or tradesman. Put the tools up, it took me years to get past that stage

2) Always provide a contract. That's one of the main roles in being a contractor. Contract - Contractors. Everything should be in writing, scope of work, estimated completion date, warranty, change orders...everything. 

3) Team up and build relationships with good subs. Your subs are your team, the better your subs the better your team and results. Good subs are not cheap, so you may have to boost prices. My guys have been with me for years. 

4) Study your craft...Study the code book. There is a reason the GC code book has every trade code. We are suppose to know codes from each trade. You should know, framing, foundation, HVAC...all codes. You should know the codes like the city inspectors and not fail inspections.

5) If you make a mistake, eat it, don't boost price on customer for a mistake you made

It took me years to learn this, I wish someone had told me this. Took a lot of years to learn the hard way and get to this point. Good luck.

@Kevin Tillery

Thanks Kevin! However I think my old lender is back lending for new construction. I submitted everything last week, they pulled my credit today and asked for two statements, which is normal. I waited on them because they have the best rates I ever found and I have a relationship with them. So I should know by end of week, but as of now I think it's looking good. Good luck on yours, let's keep our fingers crossed.

I wish you luck with financing your new construction. I have done quite a few with Lima One, but for the past 4 four months I have not found anyone lending for ground up. If you find someone please do share. Thanks

@Jason Bott I know this is old, but just came across it searching for answers that my agent couldn't answer or maybe I just didn't understand. I am a licensed GC I have general liability, but I was thinking of not renewing because I really do not work for customers anymore, only my flips and new construction. Can I just cancel my GL policy and obtain builders risk for my new construction and a single GL policy for each flip or should I just keep and renew the current GL policy? 2) On all my flips I do have a dwelling policy which has premise liability so do I even need general liability to cover my flips if I have premise liability? I flip and build all my houses under my construction company name. Thanks in advance!

@Jason Bottundefined

I purchased some land, got lots cleaned off and permits, then a week later before I got funding  covid19 hit. Right now most lenders are not lending for new construction, at least that is what I have found.

@Daniel Porter hate to hear that, but it happens. I've been got before, rehabbing a fire damage in city of Atlanta. Did everything in my power to secure property and somehow those guys still found a way in. Did a new construction years back and HVAC guy son came back to steal system, so sometimes it's the subs or their workers. Last year my framers were robbed at gun point while outside eating lunch, neighbor had a ring doorbell and cameras, but really couldn't make the guy out. Now I try to establish a relationship with the neighbors if I can, and I install dummy cameras up high, they are battery operated with red light as if they are on.