All Forum Posts by: Drew Byrd

I read about it on Turbo Tax. If you profit from the sale of assets owned less than 1 year, you get slammed with the capital gains tax (which can be 30-50%). But if you sell profit from the sale of assets owned less than 1 year, under an LLC, the IRS considers it "business income" and you're taxed at a reasonable rate.

Bill Dickson, you don't. I'm just doing it for the added tax benefit and asset protection

I'm looking for answers from either legally qualified individuals or other people who have had first hand experience with this. 

I live in Mississippi but will be wholesaling in primarily, if not entirely, in Memphis, Tennessee (I live right on the border). In which state should I incorporate my LLC?

Originally posted by @John Thedford:

Close on the deal and then resell. A friend will be filing a counter suit against a fraud next week for doing exactly what you mention. One of their arguments is going to be FRAUD and another deceptive trade practices. 

 The problem is, the whole reason I'm wholesaling, as opposed to investing/rehabbing, is because I have no up-front capital. If I close with a seller, and can't find a buyer, then I now own a house that I can't afford

I'm still learning how to wholesale and have not yet made any deals. Imagine this scenario, tell me if this has happened to you, and how you responded. You're bringing potential buyers through a seller's house to show the the condition, expected repairs, etc. The seller deduces that one of these people are someone you might sell their home to, and they begin to wonder why they couldn't have sold their home to one of these buyers at a higher price than they are selling it for to you. The seller gets angry, feels as if you've cheated them, and wants you to rip up the "option to purchase" contract you sign with them.... What should be done in this situation/what can be done to avoid it in the first place?

I live on the Tennessee/Mississippi border, and I will mostly like be wholesaling in both states. Do I need to have one title company in Tennessee to close my TN deals, and one in Mississippi to close my MS deals, or will one company complete transactions in both states?