All Forum Posts by: Aaron Scott

So I'm going to lay out the situation the best I can and ask advice. First off, I'm in Alabama. Myself and a partner went in as partners on a flip deal, where he bought the house and we split the costs of rehabbing. I did about 1/2 of the work and took sole responsibility for contracting out any other work that I didn't have the time to do on my own. Since were early on in our partnership, where we're still figuring out the proper structure, profits were to be split 50/50 at sale of property and I basically agreed to not be paid for my time/labor (although it is partially accounted for in the profit split). Not that this probably matters, but this is work outside my normal day job, so mostly all afterhours and weekends. House is done and sold for a successful profit. We did not form an LLC or other entity, and yes I understand things shouldn't be done the same as we did on this one in the future. My real questions is as follows: Since we split the rehab costs and agreed to split profits, my partner first wrote me a check to reimburse me for rehab costs that I had in, and then a separate check that covers our 50/50 split of profit but basically wrote the check out as payment for my work on the house instead of stating it was a profit split. Speaking in terms tax implications, I guess my concern is that it might be treated differently if shown strictly as profit vs payment for labor. There may be no difference, but I wanted to be sure before tax season gets here. I plan to talk to a local CPA if needed (and of course when taxes need to be done), but so far am having trouble finding those with real estate backgrounds, at least by recommendation by those I trust. Thanks for any help and sorry for the long winded topic!

Thanks Boyd. I appreciate your response.

I have a lead on a home where the the daughter a deceased family member, wants to sell the deceased home. The home was owned free and clear. There were several hospital liens to the deceased person that amounted to nearly $80,000.00.

I haven't asked the seller about the liens at this point, but assuming the seller was the beneficiary of the home for the deceased person, I was curious to know if the seller would be responsible for paying those off, or would those liens have been payed off out of the estate of the deceased? If they were payed off out of the estate, would I see a release of the lien in the probate records (right now I do not see that they have been released, but only the record of the lien itself)? Is there any way if I bought the home from the seller that I would be responsible for paying these off? Thanks for any help.

Sorry if these aren't the best photos.

Hello everyone,

I would like to remove this mantle and re-tile the floor and fireplace surround in a lighter colored tile and then replace the mantle. Question is, can the mantle be removed without damage? I'm unsure how these are typically attached to the wall. I assume it is possible and shouldn't be much work, but wanted to ask if anyone had done this specifically before.

Thanks.

10k with carpet, paint, a few new lights and fixtures and right about 20-22k is getting to right about the point of diminishing returns on this one. Thanks.

Thanks again for the replies.

I'd be putting in 10k, partner would likely have a little under 35k in after repairs, and the rest leveraged through the bank if we do just carpet and paint (plus a few other minor things).  There isn't much chance to lose money if that's the way we go (approx. 50k to play with not counting fixed costs of the deal), but there is opportunity to make more with more rehab...Risk Reward is the game, or so I hear.  As Larry mentioned though, the learning opportunity is probably of the most value to me on this one. I just wanted it to be fair to both of us.

Thanks for the all the replies. Some things to think about!

JScott

Well actually I don't hate hearing that. I'm kind of glad to hear that I'm not getting ripped off here, although I do feel that I was 75% responsible in finding the deal and motivating the funds guy to even get into it in this area.

I do handle contractors as a project manager all day long every day, although not in residential construction, I have done it in commercial construction, so its not that I don't understand how to do this, it just hasn't been mine or a partner's money before. I also be doing part of the work (refinishing cabinets, installing light fixtures, probably plumbing fixtures, I've done plenty of handyman work before). Not trying to sell my case so much here though as get opinions. I guess my plan was to find the deals in the future as well, but this one just came to us by a mutual friend and I strongly encouraged him to jump on it (I originally thought I'd get a loan from him and do the deal myself, but that's not how it went).  Thank you for your insight.