All Forum Posts by: Deborah Wodell

Getting a General Contractor (GC) license can be a smart move, but it depends on your priorities as a flipper. It might save you money on labor and give you more control over projects, but it also means taking on more responsibility for permits, inspections, and subcontractors. If you enjoy the hands-on work, keep in mind that managing as a GC might pull you away from that. Alternatively, partnering with a reliable GC can help you scale without adding extra responsibilities. It’s all about aligning it with your long-term goals.

Hi Randy!

It's awesome that you're diving into house flipping, rehabbing, and BRRRR strategies. Starting with education is key, so you're on the right track! I'd recommend networking with experienced investors, joining local real estate meetups, and exploring resources like BiggerPockets podcasts and forums.

For hands-on experience, consider partnering with seasoned flippers or shadowing contractors to learn the ropes. Also, focus on building a solid understanding of deal analysis, financing options, and project management—it’ll save you time and money in the long run.

 Hey John! Was any of your experience on file? That would make it much easier. There are a few who can do without them. 

Yes, that makes sense! 

If the flip takes longer than a year, it's still considered a flip by the IRS, not a rental property, so the length of time doesn’t change the tax treatment. Just keep thorough records of your expenses—materials, labor, permits, etc.—and work with an accountant to make sure everything is properly documented.

As long as your primary goal is to sell the property after renovating, your profits won’t be taxed like long-term rental income. But getting professional advice will help you navigate any specifics.

Congrats on the progress! A typical rehab usually takes 2-3 months, but it can take longer for a full gut and heavy rehab like yours. One thing that helps is having a clear monthly plan so everyone knows what’s expected. For example, focus on demo and structural work in month 1, plumbing and electrical in month 2, and finishing (flooring, paint, etc.) in month 3. Regular check-ins with your GC will help keep everything on track. If you’re tackling major work like a full bathroom gut, expect it to stretch out, but with a solid plan, you'll stay organized and avoid delays. Best of luck with the duplex!

Hey everyone,

I’m curious to hear how you decide whether to move forward with a fix-and-flip or hold onto a property for long-term rental income. Sometimes, a deal looks great on paper for a flip, but as you dig deeper, you realize the numbers might not line up as expected. What’s your process for determining if a property should be flipped or turned into a rental instead?

Do you ever change your mind mid-project? How do you pivot if you’ve already started a flip but realize a rental would be more profitable in the long run? I’d love to hear your strategies and any examples of when you’ve successfully adjusted course!

Since the seller needs to sell quickly, one option might be to look into lenders who specialize in mixed-use or multi-property loans. While blanket loans often cap at 4 units, there are some lenders who may be willing to consider both properties together if they understand the full picture of your deal.

Regarding your idea of separating the single-family sale from the multi-unit purchase, it’s not unreasonable to ask for the purchase price adjustment, especially since the single-family home is already discounted in the package. You could potentially negotiate this by structuring it in a way that aligns with the seller's need for a quick settlement, without lowering the cash they’d receive.

That's great you're starting together! Setting up an LLC is a smart move. When it comes to securing a loan, lenders will look at your personal credit, experience, and the financials of the LLC. While there are plenty of lenders willing to work with new investors, remember that the deal must make sense. It should have a good spread to ensure you're not losing money in the long run. Make sure your LLC is set up properly, and consider hard money lenders for more flexible options.

Great breakdown! You're spot on with how private money lending offers speed and flexibility compared to traditional banks. While traditional banks provide lower interest rates, they come with strict approval processes and long wait times. In contrast, private lenders focus more on the value of the asset, offering faster, more flexible loans for projects like fix-and-flips or rentals, which can be crucial in time-sensitive deals.

It really boils down to your priorities and preferences. If you’re looking for speed, flexibility, and a customized solution for your investment, private money lending is a great choice, even if the interest rate is higher. For some investors, the trade-off is well worth it. Banks might offer better rates but at the cost of time and inflexibility.

Your lender is correct—FHA loans can't be used under an LLC since they're for individuals purchasing primary residences. If you use an FHA loan as an individual, you'll benefit from a low down payment (3.5%) and more lenient qualification requirements, but you won't have liability protection, and the loan will stay in your name when it becomes a rental.

Using a conventional loan through an LLC offers liability protection and scalability for future investments but requires a larger down payment (15-25%) and often comes with higher interest rates.

If maximizing cash-on-cash return is your goal, FHA might be the better starting point. However, for long-term growth and asset protection, an LLC could be worth considering. It's best to consult a CPA for advice on liability and tax implications.