All Forum Posts by: Graham Lawlor

Thanks everyone for all your help!

Can anyone advise on the "proper" way to report this situation?  How would you structure it, if you were in this situation?

I'm trying to do things the right way. It's just not clear to me what that right way is...

My uncle and I bought a building together and after a minor renovation we're flipping it for a decent profit

We're 50/50 partners on the project (we contributed equal shares of the capital/expenses and we'll take an equal share of the profit).

My name alone is on the title and all other documents. This was done in part because we wanted to save money setting up an LLC and partly because he is not a US citizen (he's Canadian)

Our initial thought was to have all the proceeds come to me, have me declare all the income on my personal income tax, and I will cut him a check for 50% of the post-tax gain

Accountants I've spoken with seem nervous about this setup. One fellow said it could trigger an audit. Another fellow said it could result in my uncle getting taxed again on his profit (even though I'd have already paid tax on them)

I'd appreciate any suggestions on how we should handle the situation to minimize our risk of audit, double taxation, or other issues

Thanks so much in advance!

Graham 

That would be super helpful, thanks Les!

Very helpful, thanks Tom!

The purchase price is $1.1 and the renovation budget (and LoC amount) would be around $500k.  We're hoping to be out in about 12-18 months (ideally 12 but 18 to be conservative).

Does this sound like a good candidate for a commercial lender?  Any ideas which ones may be interested?

I forgot to mention, the building is in Brooklyn, New York

I am interested in financing renovations of an SRO building.

I am under contract to buy a building which is currently registered as an SRO. It is currently vacant and will be delivered with the Certificate of Non-Harassment (and the sale is contingent upon this).

I would like to do major renovations and eventually apply for a new 3-family C of O, rent out some units, and refinance. I am paying cash for the building and would like to get a line of credit, secured by the building, to do the renovations. I’m told it’s difficult to lend against any building without an existing C of O (even if it has the CNH).

Does anyone know lenders who are open to this sort of financing?