All Forum Posts by: Cameron Ellis

Do I pay state taxes on house flips? 

hi guys, do I pay states on house flips????

Hi BP,

 I won an property through auction.com, and is expected to close on it may 13th, however for this property i have a buyer who has already contracted to buy the property the following week. I may consider using financing for this property but im not sure which method of financing would be appropriate, their is 17k margin in between maybe 14-15k after closing and a commission to the buyers agent. 

How would you fund this deal if you were in my position ?

feel free to PM me, i have a couple contacts we can possibly JV if theirs anything of interest on the table.

Feel free to PM me jacob, I know a couple players in the market.

@David Begley Exactly right! In Memphis, we have a register site where we can see every transaction that is recorded each day. AH4R, Progress, and the other companies have all put 5 Yr Loans on their properties through Goldman Sachs, a coupe 100 million in loans at a time. 

Their not going to flush these properties on the market, they know it will never be a demand for home-ownership as it once was. 

Blackstone background is selling their assets in pools to Sovereign Wealth Funds, transactions that typically start at 1 Billion..

Honestly these companies don't want to close these transaction one by one only netting around $15,000. But pool 20,000 homes together and sell them all at once profiting $15,000 per house. 

These companies now have $300,000,000 Profit sitting on the table.. Big players don't play for small change!

i would just buy a note, and not have to worry about tenants or maintenance

Dodge Challenger, and i get a rental car every month to driving properties..

Their are only a few hedge funds out in the market, but alot of "Managed Funds" looking to stock up on properties and sell them to Hedge Funds such as AH4R, Blackstone or Colony once their stabilized. However each fund has their own exit strategy, dealing with blackstone and their background I can assume their pool of properties will be sold once stabilized to some type of wealth fund.  

@Jay Hinrichs my technique is buy properties that fit their criteria and resell them in as is condition, usually their just a little under retail.  Luckily I was able to bypass realtors and find the decisions makers and develop great relationships.

With the 3 companies I do business with in memphis, i was able to enter additional markets and sell them properties in Houston, Dallas, and Nashville without me ever having to see the place. 

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1 of the funds sends me properties that they may have purchased in a package to help them sell because it may have been in a area of town they dont buy in. Usually if i cant find anyone to pick it up they donate it to charity. 

Wow 1-300 deals thats horrible! I would suggest attracting better wholesalers to your business, those are the best deals you can buy right now.

However, you have newbies that will cross your path sometimes that don't know how to calculate APV, repairs, or just don't have the resources..  but i think as a good investor it maybe in your best interest to point those newbies towards your target areas along with a price range for each. 

Good Investors have Good wholesalers, wholesalers always send deals to their top buyers first and maybe at a little cheaper rate then their other buyers, at least I do. 

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The only way I see a wholesaler should be marketing another's property is if their is a option or a relationship built their. This doesn't mean to jack the price up 5k, unless you can find hidden value in the property the original wholesaler did not see, for instance you have wholesalers that never go out to look at a property they make offers directly from street views and public records and they get the deal. A couple months back, a wholesaler sent me a deal that was listed as a 2/2 but in fact was a 3/2 just a error in public records, by me spending the time to go look i was able to sell this property to one of my buyers 7k over the orginal price and have the wholesale discount it by 3k. So i made a total of 10k, assigning my contract on this property to a buyer that turned it down from the original wholesaler because his marketing noted this to be a 2/2. 

By the way the wholesaler only made $500.