All Forum Posts by: Don Sheppard

Thanks for the response.
I do understand and agree with you on the "exempt" thing, Just something I read while scouring the universe for some knowledge. Pretty much why I was asking on here to see what others may have personally ran into, to me it seems that it's going to be classified as income period and the seller will be responsible for the taxes on that income, only possibly/partially offset by whatever other expenses the seller might typically be claiming as part of their regular tax filing. And as such, something I feel obligated to let the seller know ahead of time in all fairness.
Thanks again

I'm hoping to find more information about a seller receiving a 1099 and being responsible for income taxes for the difference between the sale price and the outstanding mortgage during a short sale. Does this always take place, the seller receiving a 1099 and needing to claim this as income? Is there any other filing a seller might be able to do to offset this? Of course I would recommend they speak to their tax advisor, just want to be sure I'm understanding this correctly prior to signing a purchase agreement so the seller doesn't get a nasty surprise at the end of the year by me not telling her about this.
Thanks

(edit) seems I found this answer in another area on here....and if correct. The seller may not even receive the 1099 but regardless WILL be responsible for that amount as received income. Depending on their situation and tax advisior will determine whether it can be exempt income, or whether they will be responsible for taxes on that amount. Correct???

Oh, is there a "search" function on this forum? Sorry.....new member finding his way around :roll:

If I'm understanding your post....yes the margin on that last house was slim. I've learned more since then so my next deal will have more built into it. I actually had comped the house at $390k when considering the purchase but that didn't mean anything after between an out of state lender/non local appraiser/0% buyer down. I debated whether to kill the deal and take on other offers, but figured I was still making money with the adjustments, avoided additional mortgage payments, and the way some houses are just sitting right now a sale w/profit looked much better than sitting on the house letting it suck up more money. Some cash in the bank, line of credit paid off ready for the next project, and valuable lessons learned.....I can remodel/rehab with the best of them but knew next to nothing on the investment end. I'm going into additional deals much more conservative with my numbers, particularly the comps...

I considered doing a FSBO but 3% exclusive realtor fees made sense to me at the time, still does considering, since I also had other customers waiting for me to finish that project so I could get to their remodel projects. It allowed me to concentrate on those jobs instead of also trying to schedule to meet buyers/inspectors/appraisers etc.

I do plan on transitioning more as things progress, I would like to have 2 or more projects at once where I could have crews doing a majority of the work with me just pitching in where needed, managing the schedules, and finding more deals.....

Hi, thanks for the welcome. I'm in Solano County. Not sure exactly what you're asking about csv? I do have access to NOD, REO filings and currently have multiple offers in on REOs, and attempting my first short sale negotiations as well (wish me luck LOL). I'm working with a realtor on the REO offers.

My last one I just did almost went better than expected. I had it sold for $375K one week after listing it. The appraiser had a different opinion and it came in at $360k cause the market is just that bad right now. Anyway, I agreed to sell at $360k dropped my credit to buyer of $2k, my realtor took 1% less commission and we closed the deal. The buyer got a great house/good deal and I still made $23k for my labor and investment. I learned a ton about all the costs involved in investing. I'm hoping the next deal will afford me either less rehab work/similar profit or larger profit considering I spent a couple months rehabbing the house....brand new everything.

Hi everyone, seems to be a great forum. I've been doing a fair amount of reading through here for several days and just registered this morning.
I'm a remodel/general contractor and am more recently getting into the investing side of real estate. I've done plenty of rehabs for others and would like to double dip instead....invest/rehab. I have already completed my first purchase/rehab/resell which went well. Now on the hunt for more REOs, foreclosures, and whatever other deals I can find on single family residential houses.....and an open mind towards bigger and better things as well.
Look forward to interacting here.