All Forum Posts by: Cyndi Hardman

I feel you.  I once had the same type of need.  I had a credit card with a high limit, and not really a good way to access it or use it the way I wanted to.  I think I was pooling with others for a booth rental.  Cash advance from the credit card was 1. limited, 2. had large fees associated with cash withdrawal, and 3. needed an institution to withdraw and the institutions added extra processing fees.

As we learn through business transactions, it's not just the fees, it's not just cash out of pocket, it's not just the cost of hard money or any other cost that can instill fear-of-action in the business person, it's what to whole scenario nets at the end of the day.  Check your numbers, make sure that you include all your cost for obtaining your cash and that in the end, you have a profit margin that makes the deal worthwhile.

Investment Info:

Large multi-family (5+ units) other investment.

Purchase price: $800,000
Cash invested: $200,000

This is a property zoned for multi-family units. Currently, it has a SFH, which was rehabed in 2014. The goal for the property is to add a 4-plex. The owner of the property is looking to JV with an invest to build the 4-plex.

The property is .45 acres.

What made you interested in investing in this type of deal?

Seeing that the city is short of housing and that the city council had already embraced the wisdom of making 100 W a multi-family zone.

How did you find this deal and how did you negotiate it?

The heirs of the former occupant put out big flags advertising their desire to sell it.

How did you finance this deal?

VA home loan.

How did you add value to the deal?

80% of the home was rehabbed and updated. New plumbing to include new sewer lines have been put into place.

What was the outcome?

I lived in it while rehabbing. Now it is rented at $1400/mo. 2+ bedrooms/2 bath with carport.

Lessons learned? Challenges?

The initial sale price could have been negotiated lower.

Thank you. I have heeded the advise to consult a CPA and a second tax adviser.  While the capitalization for the expenses is clear on properties that we the rehabbers have purchased, there are some other possibilities based on our unique situation.  

We didn't actually purchased, but JVed with the properties.  The mortgagors reported the mortgage interest on their returns, which excludes us from being able to capitalize the same interest on our returns.

There is more research being done..we shall see what becomes of this situation.

Another quirk in this situation is that one of the properties we signed a lease agreement with permission to upgrade the property.  The property wasn't purchased until the day before we closed on the resale.  Until that purchase part of our holding costs was rent paid.

Hello follow real estate investors.  September 15th is approaching and I am finally getting around to filing my 1065 for my partnership of house flipping.  I have never filed for a real estate business of just flipping.  Our activities for 2016 consisted of two joint ventures.  The property owners held the properties in their names, we rehabbed and made the house payments during our rehab time.  Both properties closed in 2017, so no income for 2016.

How do I best construct my 1065? Is it all costs of business?  Do I need to consider cost of goods? Help?

Pre-ordered as soon as I finished the podcast--days ago.