All Forum Posts by: Alex S.

Thanks again Eamonn, I will be taking your advice and have a sit down with her. It appears from the info you have given that I might have outgrown her practice, as I have transitioned from contractor to buying houses. If that is the case I will be giving you a call, actually just left your website, so I do have your contact. Thanks again

Thanks Eamonn!  I figured it should appear under gross sales and cost of goods. Also I now understand the inventory of the properties I purchased for cash, but what about the property I have a loan on? I put down 24K of my funds and the rest I borrowed. Is that property also along with my down payment considered inventory? I believe if I understand correctly, I can only write off the interest, the cost of improvements, but not the purchase price until I sell it next year?  Last does inventory go somewhere on my taxes or just on my financial statements?

Thanks again

I have a tax question. My accountant of 12 years does not have any clients that flip houses, she has buy and hold but no flippers. Also her father was actually my accountant for 10 years and he passed, so she took over. For 12 years I have operated as an s-corp, on my 1120 schedule B, it has business activity contractor and service. So here is my first question

1) For the last two years most of my income has come from flipping the properties that I buy, I am a licensed contractor, but I rarely work with customers anymore. I flip about 4 a year, so am I now a dealer and no longer a contractor? Do I need to change my business activity on my taxes? She suggested separating the two, creating another s-corp. 

2) Last year she put the properties that I purchased on form 4797 under ordinary gains and losses. Is that right? Or should everything go up under gross receipts (1a) and all my deductions/expenses (such as materials, light bills, subs , etc) come out on line 2 which is cost of goods? My first year in 2016, I did not disclose to her that I flipped a house I just included it in my gross receipts and subtracted my expense, I did not think it mattered until she put it under something different in 2017 taxes, which is the 4797 form

3) I am about to close the year out with less in my account because I have three properties that I purchased and waiting to sell. One of the properties I have a loan, the other two I paid for with my funds out of my account. Are those considered inventory? Or would it be a write off under cost of goods? One is a vacant lot and will be new construction, not sure if that matters or not. So I will show a loss this year, because my funds were spent on buying properties and they have not sold. I am guessing that will count as a loss , but maybe not if the properties are considered inventory.

Thanks for any advice in advance 

I've used Lima on 6 of my flips and so far they have been great for me. Except one time I had a big problem with an incompetent appraiser who almost killed my deal. However the seller agreed to drop the price, which worked in my favor, because I sold it 8 weeks later and the appraiser was off 45K. The Lima appraiser was off that much and I knew she was from the beginning, but it worked in my favor. So thank you to her, I got the house at a much lower price.

 Thanks Michaela. I never thought about that or took that approach. The houses I have flipped have been at least 30 minutes from my house, maybe I just need to look in my own backyard to find next deal.

If I had to find a deal to save my life, I guess I wouldn't make it. Seriously it has been a little rough finding another deal since I sold my last property in Dec, almost 3 months ago. Are others having this same problem? I spent a little over 2K last month on PPC, got a lot of tire kickers and a few buy and hold deals, but no flips. Signed up with an agent...still nothing. Most houses on MLS seem to be overpriced and the ones that may work are gone before I blink. A few wholesalers have called with so called deals. They tell me it's 5k worth of repairs (I never tell them I am a contractor) I get there it's more like 20K. Thought about just building because I can get a basic house completed in about 90 days after receiving permit, but haven't been able to find any decent lots. I found some lots in old neighborhoods, but not sure if it would sell...

So just wondering how is everyone else flipping 10 + houses a year? Is 2K a month on advertising not enough? Went to a few meetings, everyone else is looking for deals, so that did me no good. Mailed postcards ...nada (but only did 1K) I know I should do more. Usually after spending that much online I have a deal..but am I being too impatient. Just some thoughts on others doing deals. Thanks

Thanks Rama and Greg, I am going to use the agent. I decided to sign the non-exclusive agreement, change it from a year to 3 months and add a stipulation. Like you said Greg, it is worth enlisting an agent to help with acquisitions right now, so I don't think it will hurt if I sign the non-exclusive agreement, it stills gives me the opportunity to pursue off-market deals. Thanks again.

I had a pretty good year, last year flipping houses, but all my deals came from my website and my own advertising. As of late I have seen a couple of houses on the MLS that I want to make offers on, so I reached out to an agent.

Today she sent me over a Non-Exclusive Brokerage Agreement to sign. It is for one year (which I will ask to change) and 6 month protection period. I expressed that I pretty much know what I am looking for and that she does not have to drive all over Atlanta letting me into homes, I basically just need my offers submitted. I understand the agreement is to protect herself in case I run with a deal that she present, which I would never do, but of course she does not know that. I read the entire agreement and my question is, if a deal comes through my website or from some other source, would I still owe her a commission.? 

She uses the GAR form and under 5A commission it is really not clear. It appears as if I would still owe a commission.

I've used Lima 3 times myself and I haven't had any real problems except with the appraiser low balling almost killing my deals. Other than that they have been good, have some of the best terms around, and closed in about 10 days. Haven't used them for new construction, I am assuming that it is still for 13 months, even on new construction.

Listen Tim normally I don't comment, I just usually read everyone else comments. But I had to put my two cents in. I am a licensed contractor in Georgia, I make my contracts/job descriptions very detailed. I leave no room for mistakes like this. I would not pay this guy one dime. He said "Remove & dispose of the existing roof" For him being the professional he should have been a little more clear, I would have said something like replace front slope and put in parenthesis "this does not include entire roof, just front slope/elevation, or main section of home". I would have made sure that somewhere I stated it did not include entire roof and what we were doing. He said existing roof, a roof is not one section, it is one roof that covers the entire area of the property.