All Forum Posts by: Cody Skidmore

@Brian Eastman that's exactly what I was assuming. Just wanted to be sure there was no other options before I moved forward. Thank you!

My fiance and I recently purchased our first property to flip. Prior to purchasing the property we created an LLC and created a bank account for the LLC. We both also work a regular 9-5 job. Actually, we both had just changed our 9-5 jobs shortly before we purchased our flip. I had a normal 401(k), while she had a 403(b). We were both going to rollover our retirement accounts from our old jobs to the company that holds our new, current retirement accounts. However, we are now at the point in the flip where I need a truck and trailer on a daily basis. We have enough in our old retirement accounts to purchased a newer truck with cash (we would purchase the truck under the business since it would be used primarily as a work truck). My question is can we both roll our retirement enold accounts to a self-directed IRA and invest the funds to our business and use that money to purchase a truck? Or would this be considered a "prohibited transaction" in the eyes of the IRS? Is there any other way that we would be able to use the funds from our retirement accounts to purchase a vehicle for our business without getting stuck paying taxes and a penalty? I apologize if my question is hard to follow at places but any ideas or thoughts would be greatly helpful and appreciated. Thanks!!

@Basit Siddiqi Thank you for your input Basit. I've contacted a couple different CPA's and scheduled meeting with them this week to look at my options. I just wanted to get some ideas of how to move forward. Thanks again everyone!

@Cody Skidmore Thank you both for the advice! I'll be talking with a CPA this week. It's one thing I've been putting off. So many aspects of this business lead me back to needing one. You've both just confirmed it for me. I'm glad this is one place I can go for guidance! Thanks again!

Hello everyone! I had a quick question regarding tax deductions that I wanted to try to get an answer to. I plan on putting a home office in my house and had read in BP's "tax strategies for the savvy real estate investor" (which is an amazing book by the way) that you did not need to have an LLC or business entity to be able to write off the cost of putting the office in.. I just wanted to verify that I would be able to do this and not get stuck in the end without being able to deduct it.. Any input regarding this matter would be greatly appreciated.! , Also, as far as flipping goes I'm really only able to write off my gas, mortgage interest, taxes, etc.. Correct? Just want to make sure I'm covering all my bases before I dive in! Thank you in advance!!

Thank you Ned! I understand the ordinary and necessary expenses after ready the BP book on tax strategies. The way you simplified it helps. Does anyone know how it would work for setting up a home office without having an LLC or other entity? I know the area must be the primary place of business and exclusively for business purposes but will I run into issues come tax time? I'm already very grateful for everyone's feedback! Thanks again!

Thank you guys for your help. At this point in time my bud was accepted with 10% down. I was unaware of any of the repair and rehab costs were going to be write offs or deductions.. Ill be sure to talk with a cpa! Thanks everyone!

Ive spent the last 2 years gaining as much knowledge as possible about Real Estate. Ive worked as a Mortgage Loan Officer for a few years, an Insurance Agent for quite sometime, I also have about 15 years of construction experience. However, Real Estate is what I'm passionate about. I absolutely love everything about it! After many declined offers on properties, I've finally got a solid deal on the table. My wife and I found a tax lien property in the county where we live. In a great neighborhood. Close to downtown, the hospital, and a few schools. This afternoon our bid on the property got accepted. The house is not move in ready by any means. We offered $20k with my estimate of $50k in renovations, which for this one I will do myself (with some help from friends and family). Luckily, I have the knowledge to complete the renovation with very little contracted help. Comps in the area run between $145K to $170K, with an average of $98/square foot. This property is on a corner lot and is 2000 square feet with a 680 square foot garage. Thankfully, my wife and I have the ability to pay for the house and renovations with cash. To maximize our tax deductions and utilize every write off we can we need to set up an LLC.. But when should we do that? The house is a flip and will most likely not be done by the end of 2018 so what type of problems will I run into at that point? Would they carry over to the next year? Can someone please offer some insight? Any help would be greatly appreciated regarding this time sensitive matter!! Thank you!

Thank you for your input!

I've recently become aware of the Homeopath program for purchasing houses through Fannie Mae. It allows for a small down payment while allowing improvements needed to be added to the loan.. I'm wondering if anyone else has done this before and if so how did it work? Are there areas you want to stay away from? Any information regarding this matter would be greatly appreciated!! Thank you!!