All Forum Posts by: Bill W

I was under the understanding you had to do several houses a year before the irs
considered it a business. one house would be an investment, taxed at ordinary income rate not subject to payroll taxes.

to do a one house flip. Three of us are wanting to put = amount of money to buy and rehab a house then flip it. Profit to be split evenly. We are paying cash no loans. LLC seems cumbersome, cpa says it has to be registered with State, dept of revenue, and unemployment office.

My brother wants to invest money on my first flip. I don't want to put him on my llc with me. When I sell property is there any kind of tax problem for me when I give him his shair of profit? Ex If I net 20k and give him 8K for investment, I only pay tax on 12k? Do I have this figured correctly?

What % are you comfortable with?

GC.Good Contractor?

Just looking to do our first deal. Partner and I have 60k to get started. We are both very handy and can do much of the rehab work ourselves. Are thinking of starting out slowly with this, and buying a reo starter home we can fix up and flip. Would you pay cash and flip small starter home, or use 60K as down payment for something bigger to flip for first deal. I can see the rationalization for both. Wise man once told me 100% of foreclosures occur on homes with a mortgage.

Thanks for the reply's, some very good info.

What are the best web sites to find foreclosed and short sale properties? Every site I have found is a pay site. Looking for sfr to be my first flip, I am very handy and can do most of the work myself. Have about 60k saved, looking for starter home obviously. Figure I can do better with my money vs the .05 percent money market is bringing.

Thanks John, I want a property which can mostly pay for itself, but I am more concerned with long term appreciation. Real Estate is down now, but history shows us it will come back.

I really appreciate all of the input. Operating expenses consist of many things, one of the biggest being taxes. If someone lives in a locale which has low rates this is going to drive down the expense ratio vs a high rate locale.I have seen some people on here state they never pay more than 50% market value for properties. This is a great sounding idea, except in my city you are only going to get that type of property in a terrible part of town. It may cash flow good, but what is the property going to be worth 20 yrs from now? I am buying this property because of condition, strong rental area and most of all location.I would like for others to chime in given the criteria I have given.
Bill