All Forum Posts by: Andrew B.

I have flipped a few houses with great success and a good friend wants to put in 50% of the purchase price and 50% of all other cost with my next rehab.

I have always used hard money at 5 points and 12% thereafter. I found the property in question and will be doing all the work etc, he's literally just putting up 50% of the cash. Now if it was hard money I would borrow 70% and then add my 5 points and 4 months holding the property- not so bad.

What would be a fair deal in the experts eyes? I have thought of taking 50% of the selling price and adding extra on for my work etc, and then the obvious of maybe giving him a better deal than my hard money lender at around 20% straight-up. Any thoughts would be greatly appreciated. Im sure there are pros and cons when it comes to working with a friend in terms of not having to list him as a 1st lien holder etc. Is it worth taking the knock a little profit?? What about the tax I end up having to pay on our "combined" profit in the end.

Thanks

Thanks for the info. Bill, I had already knocked on the door, but no response. I left a note, but just letting them know I would be interested if they where wanting to sell, handwritten and informal. Thanks for the heads-up on the new regs.

Simon, thanks for you advice on the realtor side of things. I suppose with this being my 3rd property Im still naive about all the advantages of when to use a realtor, but your right- if I find the property I may as well see it through. I have a great title company and attorney, whom are teaching me what to look for and where to find it, before I get them to help me structure and prepare contracts from now on. I used a realtor for both my previous properties, but listings seem few at the moment and I need to learn how to approach each potential buy independently to avoid dishing out potential profit unnecessarily.

Im going to the property today to see if the home owner is there. Thanks for all replies! Any advice on getting my realtor involved before I know wether the homeowner even wants to sell? The property is not listed yet.

I have found a property, which is in the pre-foreclosure process in S Florida and was wondering if its better to approach the home owner by means of a letter, which Im sure they would have many, or knock on the door and chat. Im nervous to knock on the door, but I do feel it would be more personal and a cash deal would help them avoid foreclosure and hopefully retain some credit etc. If its pre-foreclosure and the tax deeds are still in the homeowners name it would be them I approach and not the lender right? Also, if its not listed, would it be beneficial to use my own realtor to help deal with the bank and homeowner etc, or would my attorney be enough help.

Also, what incentives to the homeowner would be acceptable, beyond paying all the late and missed payments owed to the lender? Like paying their moving cost etc.

This is my 3rd investment deal, with the 1st being a short sale listing which we just sold for well above what we estimated, but Im still really new at everything and even with all the reading I've done on the subject of "pre- foreclosures" on this forum and elsewhere I would greatly appreciate some help and knowledge from the pros on BP to help me acquire this property.

BP has helped me so much and I hope to share knowledge one day!

Thanks

Andy

Thanks Steve. I found another company called "insurers for investors" too. Will call them both. I spoke to a few that specialize in insurance whilst you do your rehab, but its all done and i just have a 3 week period until closing Im worried about.

Does anyone have a recommendation for a short term insurer in Florida. I need 1 months vacant property insurance until my sale closes at the end on the month. I have done some research, but referrals are always great.

I have invested in a few properties and would like to start stepping up the amount of flips per year. Im at the stage where i need to form either a Corp or LLC and am not sure which is the better route. I have a hard money lender whom i have used to purchase 2 properties, which he would invest in 50-70% of the price and hold the note to the property- like a mortgage. Does a Corp or LLC work better when working this way. I will be doing a the next few with my own capital, but will def need a investor or hard money lender down the line. Does one of those options help if there is ever an accident with a sub, in terms of me getting insurance or having my personal finances separate from my business? Im trying to make my CPA's life easier at the end of the year, but def need guidance! Thanks

I know this is a Q I should ask my CPA, which I dont have yet but, when one has to pay long term capital gains on a property that was purchased as a second home, is it possible to claim any expenses for fixing it and all buying and selling costs against my tax return?

Hi J

Thanks for the response. We purchased it for holidays and and family visits etc. We kept it for a year and decided it was expensive just to use randomly hence selling it. I would like to start flipping in the future when i quit my day job, but that was never the intention with this one. Im not sure how the irs sees things though? When is capital gains paid anyway- with your yearly tax return?? Thanks again

I am selling a property I have owned for one year. The problem is the date the deed was recorded is not the date we closed. When does the iRs see that one year starting from- date of closing or the date someone actually recorded it 30 days later. It's a second property and would hate to pay full tax for owing it for under one year making it a short term investment. Also, my wife originally purchased it in her name and then we did a quite claim 4 months later to both our names. Who's tax do we file this under and once again do the IRS work off the original date or the undated quit claim date?
Ps: we are in Florida. Thanks