All Forum Posts by: N/A N/A

all cash,

It's been awhile, so what was the outcome on this house?

Always enjoy reading your posts - they're informative and to the point. Thanks for the info I've gleaned from your posts.

-Dean

driven investeen,

I'm one of the least knowledgeable people on this site, so take everything with a grain of salt - and verify elsewhere... But I think that the capital gains rate you're aiming for only requires 12 months ownership. I think what you're talking about is when you own and occupy a property for 2 years you avoid taxes on $250k - doable every 2 years. Of course there are limitations based on time owned / time occupied in a 5 year period. If it looks as if your mom or partner has been occupying it for the last 2 years, then everyone would benefit from having them sell it to avoid taxes. If you transfer it to your name, you still would have to show 2 years ownership on top of your 2 years occupation. Hope that helps, and you need to verify anything I tell you. Good luck

Here's a deal I'm looking at, and it's the basis for my future investment plans. I'm hoping you guys could give it a scrub and let me know what you think... I'm about to close on a small single family home.

Purchase $85k
Repairs $8k (plus holding costs for 5 months)
Misc purchase and selling costs $5k
Tax roll value $107k
Comp value about $108k

Avg days on market about 79 (from memory)

I'm going to FSBO, and see if that works for me. So no selling commission. I figure 2 to 3 weeks to do most of the rehab myself. Plus, about 3 months sitting on the market, and a month to close on it. It looks like $8k to $10k profit is very reasonable. I would be putting in about $10k, but I would about double that at the sale within five months (probably faster, but I like the worst case scenario). Seems to me like a good return in a decent amount of time. What are the thoughts out there? Is only making $10k profit on a house worth it (it is to me, but I'm broke :wink: ) My goal in the next 3 years is to buy and sell one a month, with 4 or 5 constantly on the market. I'm only looking at $10k profit at a minimum (and probably that being the avg). It doesn't seem like a lot when I hear people talking about making $10k on a contract flip, or $40k on some rehab... Anyway, it feels good to lay out my plans and get some good opinions on them. Thanks guys.

Bill,

I'm just getting started in this, but I've been researching the rehabbing of properties for a few years now. This past year I've had a HUD fall through due to a sub-par mortgage broker. My second one looks like it'll close in the next week or so, but it's taken the 45 days plus a 30 day extension. And it's still looking like it might not happen. And this one is through a large national bank that probably does a kazillion of these every year. I guess I've had some terrible luck. And I got sidetracked on this topic... Anyway, I agree with you 100%. I don't see any potential conflicts with these properties that you're putting bids on (HUD/VA/REO's/whatever). If, like me, you don't plan on actually buying and selling for others I fail to see how conflicts can arise. I plan on geting my license when I'm done rehabbing this house. At the very least I'll make about 2.5 to 3%, and if I FSBO, I get to keep it. If I put it on MLS and put a bounty on it, then my purchase commission will help defray the selling commission... If you can get to the point where you're moving about one a month, that's a lot of money for holding a license. And even more if you become your own broker...

CPARETAXEXP,

Sir, you spoke of an SE tax. What does that mean? Also, I understand a little about the taxes and business entities - just enough to confuse me. I am cash poor, so for the short term (next 2 years) I am planning on mostly rehabbing to sell. Once my war chest is built up I'd like to do a 50-50 combination of rehabs to sell, and building a rental portfolio.

My main concerns right now are: 1) the best business entity for me - maybe a sole proprietorship is fine... 2) and how to minimize my taxes, even though I think the gov will classify my houses as inventory, putting me in the top of the capital gains tax bracket.

My great State of Texas has no income tax, and I'm not sure if this endeavor counts as a business in such a way that I should get a state tax ID. I think the only thing I know for sure is that I need a good real estate accountant. If anyone knows any around Dallas, I'd appreciate the lead.

Thanks for any answers you guys might send my way.

-Dean

Hello everyone. I've been poking around the net and really liked the mojo on this site, so I actually joined for once...

Anyway, I'm just getting started, and I've already had one deal fall out from under me, and now my second deal is going poorly. I've already gotten my only available extension, and it doesn't look like my bank is going to finish their stuff in time. Anyway, if it was easy everyone would be doing it. The harder you try, the bigger the rewards.

I look forward to participating in these posts, and to everything I can learn from them.

Thanks,
Dean