All Forum Posts by: Franky Juwana

Hi Ria,

   I know it's few years after your question submitted but I'm also in the same boat, how did you resolve your problem?  My partner and I also bought a house with 1031 Exchange and now in the process to purchase the next property from the previous proceed using 1031Exchange. 

Every where we asked, it is not possible to convert from our personal name to an LLC (which own by us).

Thx    

thanks for the suggestion, yes our attorney took it easy and title company didnt say anything either. lesson learned. 

I flipped a house in the beginning on 2020 and project got held up due to Covid-19, so construction continued and it's done. 

After got an agreed offer, we went to contract and buyer's attorney found that my side neighbor shed is 1.5 feet over in our property, so they want to rectify by have them signing an affidavit saying that they can't claim the property. But my side neighbor saying that they have been there for a long time and would not move the shed, and if they have to, they want to be compensated by the new buyer. 

The buyer's attorney refused because it is illegal shed (because it's built on the side of their property and trespassing to my property). 

Now, I already holding the property for close to a year, and I want this property sold and move on to another project.  So I negotiated and willing to compensate $1500 for them to purchase a new shed, but today after, they said $4000 would be the price for them to sign the affidavit. And also mention about adverse possession claim after certain years. But they just want to be compensated and not claiming the property. 

I can't give them that much but not willing to drag this issue to court either which will take time and money, specially for me who already took more time that needed to do the flip. 

I really hope this will get resolved before it gets too expensive and time consuming.

Anybody had the same experience? recommendation? suggestion ? 

Thanks,

   

Finally after a long crazy 2020 year, we have signed the contract on my flipping house that we did in the beginning of 2020. 

Original Projected sale was April but it was pushed back due to Covid, so we started selling the beginning of October 2020, had a good offer within a week on the market, Agreed with the price and contract was signed last week. 

Luckily we had enough capital for the unforeseen craziness, and we're able to make about 12% net profit even I felt I made tons of mistakes on our first flip. 

I have a quick questions for all the House Flippers out there, 

How do you maintain Flipping business ... project after project, our concern is paying the cap-gain tax which will kill our profit tremendously. So if we decide to keep going with the flipping. 

We can't use the 1031Exchange due to 1 year or more rule. 

The project was done after it was held up for 3.5 month during pandemic, but we continued after we're given the green light. We're just a little bit over budget because we just kept finding things to improve which is normal but not so bad. We like the way it turned out. 

We learned new skills and some new tricks along the way, 

so here are some pics before and after 

@Carlin Randolph I'm not too familiar with Lease to Buy, have you done it, how do you structure it? what is the downside and upside? and if they stop paying, am I evict them or foreclose ? In NY is not landlord friendly State, so I need to see if I go to court I wanna make sure I have a solid case. 

@Dave Foster Thank you, I actually agree with you, we discussed it tonight and we think we just wait for a year and half, it wouldn't hurt instead of paying hundred of thousands in taxes. Doesn't make sense. 

I mean, i'm involuntarily become a landlord but it is what it is, need to adjust and work with the current situation.  

thank you again! 

Ok, here's the situation, My partner and I put our money and bought a house to flip.

His share came from 1031 Exchange proceed and my share came from my own pocket. We almost at the end of the construction being done, we're excited to sell the house. 

After consulted with a Financial Adviser who understood with 1031 exchange subject, basically he said (I'm paraphrasing)  because Flipping isn't considered a investing by the IRS (if less than 1 year), the proceed cannot go to 1031 exchange for the next project unless if we hold it for 2 yrs or some say 1 year + 1 day, then we could do 1031 exchange.  Otherwise, My partner will have to pay the tax on 100% his capital + the gain on selling our current project. 

Being a landlord is not my intention at the moment, it has to be another way without have to pay a huge amount in taxes. 

Any advice or suggestion will be appreciated, we would like to continue the flipping venture down the road without needing to pay huge tax. 

is Self Direct IRA an option? what about lease options?

thank you all, 

Hi Matthew, 

It is awesome that you willing start early with parents willing to help. I would start by asking and shopping around to Banks/Credit Union, give them a call and ask alot of questions. Are your parents ex military? VA or if not look into FHA, you can put as low as 3% down, of course it comes with PMI as well.

Look into "House Hacking" @Brandon Turner started with this at his early Real Estate Career, so you live in the house occupying 1 unit while your tenants in the other(s). If you get your math right, you can live for free or even make money. 

Depends on where you located but 100k total at some areas maybe not enough, but never discourage, you've come to the right place to seek advice.

I have to start with this.... 

So the last 10 years I have been reading hundreds of forums, reading books about real estate, listening to audio books, attended seminars, bought real estate materials etc... so last year I decided to do long distance out of state buy and hold investing in Texas (I'm live in NY) but at the last minute, 2 parties didn't reach agreement over $2000. So deal failed, but I was glad it was failed considering few things didn't add up and I might've made mistakes in my calculations. 

This year, my ex-co worker just closed on his 2 family investment property, the proceed he bought a house for himself to live and the rest he planed to buy commercial but he didn't have any luck so he contacted me to partner up, I guess to split the risk sort of saying. 

Long Story short, we found a "ugly" house on mls that not in foreclosure yet that some company bought it directly from owner, but everything still in working condition, just need cosmetic rehab. 

Here's the breakdown:

Asking : 350k  , we offered 315k, agreed at 324k 

ARV : 460k with 40k-50k for rehab

Closing cost 5k

We use all cash because my partner money came from 1031 exchange (250k) and I just put a small portion of it (75k).

the plan is to keep snowball this until we buy commercial with good passive income or keep flipping. 

In my opinion, rental is not preferable in NY due to law side with tenants who can literally live for free for close to a year.  

It is not the end, it is just the beginning, I'm excited...  

I'll update you again with After pictures once it's done rehab. 

Thanks again BiggerPockets! 

Here are some pics before