All Forum Posts by: David M.

@Chris Wilkening

That sounds like a personal thing on how you manage your funds. Doesn't seem like you have a Corp or even LLC. So, there is no "taking profit" from a tax accounting, or I guess accounting, standpoint.

If you keep a “hard wall” between your checking and savings account.. then I guess you’d better open another account for your operating reserves.

Does this help? Or am I not understanding you?

@Elana Greer

Determine your long term investment/financial strategy. If it’s saving, try looking into solo 401k. Appears to be better than ira type options for self employed tax advantaged saving account

@Kristen Hernandez

Honestly, depends on how you want to take your business/investment path. You’ve already done two flips, great! Are you comfortable with your methodology? What pros and cons of the license work for you?

Some more pros (or reiterating):

Direct acces to ON MARKET properties

Network with other Realtors and maybe get leads from them

Earn the purchase/buy commission (not much for a distressed sale)

With a supportive broker get discount on listing commission

Cons...

Have probably ~$2k annual fees

Probably have to sit the front desk at the office

Go to office meetings / maybe have to “make money” for your broker

Have some startup costs for signage, etc

Technically need to declare yourself as Realtor all the time (could be a pro)

Time taken away doing “realtor stuff” when you could have been focusing on your primary/niche profit activities

This being said, having a license may just be part of a career path. Maybe if you do active sales, those transactions will give you more experience to do your own real estate investments.

I hope this perspective helps. Good luck

@Michael Plaks

Oh, that does make it complicated.  I've never had to deal with real property on SchC.  Is there a reference you could send me?  Maybe a IRS Pub or Audit guide?  Thanks for all your assistance.

@Michael Plaks

Yes, you've got the idea.  I'm trying to figure out the tax treatment to see what "I can keep."  Now it basically makes sense.  The ratio that is rented is just another passive endeavor on schE while using it as my own office is active, thus on SchC.

That being said, when it comes time to sell is depreciation recapture the sum of the depreciation taken on both Schedules?

@Kuriakos Mellos

Agents work on a commission basis. So, having one spend time looking for a deal that you won't execute with them "isn't very nice." If you've outgrown your first agent, but still want to use him or her on your SFH, I would just"partition" the work — almost like having two businesses and make it clear to them.

Since the agents are in different agencies as you say, ie they work for different brokers, there shouldn’t be a good way for them work the same deal with you. Agents work for brokers, and every transaction is broker to broker. If the two agents worked for the same broker, they could partner up and work with you and setup some sort of split commission internally with their share broker

@Alyssa K.

Even as a Realtor, I have to honestly say it doesn’t seem to look like you need one. If you can handle rentals all by yourself, why not the sale? You’ve purchased multiple times so you already know the transaction process

At a minimum, list on something like Zillow. I’d recommend at least offeroring to cooperate with realtors who want to bring their buyers, unless you want to try to save that commission as well.

I assume/hope in Texas you have discount brokers out there who will put your listing on the MLS for a small fixed fee (~$500) but won't handle the transaction for you. At least, all the Realtors will see it, but you will have to offer a cooperation commission.

It sounds like you know what you are doing. Real estate isn’t like law where you really should never represent yourself. You appear to know what you are doing, know your market, and I hope can rationally sell/negotiate the transaction. I’ve heard of one couple who takes the arrangement where one is the “seller” and the other is the “realtor.” Or creates that separation to keep an “emotional barrier” that a Realtor provides.

I will say, security/safety should be something to think about. If you have to show property and you have young children with you, you might want to rethink your plan. I don’t know if you guys also use electronic lock boxes — I hear about how some states are still slowly moving to them. They are expensive, but good to have since only Realtors have the app to open them, and they are satellite tracked so you know when they are opened. That being said, investors fsbo all the time...

In short, what are you looking for from a Realtor, and is it worth it to you.

Just my two cents. Take care and good luck

@Ben Gabin

When you say business income, is that W-2 type

Income?

Anyway, assuming you don’t have a C Corp, all your 1099 income will get lumped effectively together on SchC (if you have multiple ventures, you’ll submit multiple SchC but they will flow together onto your 1040). So, you really don’t have a choice on where to take a deduction — besides you can’t take unreimbursed business deduction for W-2 type work

As for your other deal, that depends on your accounting methodology. If this is a smaller deal, lookup “Completed Contract” method. Otherwise, more complicated acccounting methods such as percentage complete and/or accrual may apply

NB. I’m not a cpa or accountant.

@Brett Stander

All of the above... yes, your realtor fees will probably be about $2k yearly... after access (to both properties and networking with agents), the next is for you decide if having a license is worth it for you to earn a commission here or there. My Realtor earned tons off my rentals since after renting from me, they generally need to buy something next. Since my agent also was dual role as my psieudo property manager, she picked up all those leads and got tons of transactions, and the subsequent transactions

But, if you have no interest in being a salesperson, might not be worth it for you.

@Shanna Barnes

I’ve only heard bad experiences. If you look at their policy in detail, they tend to only cover “superficial” stuff. So basically the $50 to $100 repair is covered. But when you have a serious problem is not covered. I the term “warranty” is a misnomer given the limited coverage they provide