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All Forum Posts by: Mike G.

Mike G. has started 11 posts and replied 556 times.

Post: The Occupants from Hell!

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259
Originally posted by @Jon Klaus:
Originally posted by @Will Barnard:

Yes, in a holding pattern until October, I am sure the occupants are so disappointed about having another 6 months of free room and board.

 So in California, are property owners required to feed their squatters, too?

 If not, I'm sure that law is coming soon...

Post: Looking for Los Angeles Real Estate Investors Groups

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259
Originally posted by @Kevin Dugan:

@Mike G. of the clubs available do you have any recommendations? 

Yes, I recommend going to all of them to find the ones you like best.  :)

For me, I think the FIBI meetings tend to be very good.

Post: spending on an REO property even before closing

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259

Maybe you can ask the seller to do the necessary repairs and in return you increase the purchase price by the amount you would have spent on them yourself.

Post: Looking for Los Angeles Real Estate Investors Groups

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259

Go to the meetup website and search for "real estate investing" and you will find many clubs/meetings in the LA/Orange County area.

Post: New investor question

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259

Tried to mention Steven Hamilton since he is an authority on this topic, but accidentally hit the Post button...

Post: New investor question

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259

It doesn't matter if the flip takes 1 month or 2 years, the "profit" on their loan is taxed as interest income.  If they go in with you as an equity partner, the time frame still doesn't matter and they are just taxed on the profit as ordinary income.

@Steve

Post: First Solo Flip & I'm In Trouble

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259

First, immediately speak with your lender about extending the loan.  If they don't want to, start speaking with other HM Lenders about getting a new loan on the property.

Second, pay a professional to stage the house.  This will add color and make the home more attractive.

Third, prepare to drop the price more.

Post: capital gains tax on my short term flip?

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259
Originally posted by @Clint Worland:

So there is no benifit with running it through an S corp?

If you are an LLC or corporation, you can avoid having the tax withheld upon the sale. A competent escrow person should know what to do. I think it's just checking the right box on form 593-C if I remember.

Post: How to determine when additions are worth it? San Diego, CA

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259

Talking to a realtor and a mortgage broker in your area about any issues with it is a good idea. I don't know about there, but here we can list a house and specify the approximate total square footage as estimated. That's another good question for the realtor. For me, it's not worth getting these additions permitted. What happens if the inspector comes in and finds out it's not up to code and you have to tear it down? Was that worth it? But maybe your market is different - here, people buy houses with unpermitted additions all the time, as long as they were built well.

Post: How to determine when additions are worth it? San Diego, CA

Mike G.Posted
  • Rehabber / Flipper
  • Simi Valley, CA
  • Posts 597
  • Votes 259
Originally posted by @Peter Chan:

...it does affect the buyer because they will not be able to get a loan from a bank. This will reduce your potential buyer pool to cash buyers and private-money loans.

This is not necessarily correct. We've sold a couple of houses with unpermitted additions to financed buyers with no problems (both were FHA loans). The quality of the work was considered acceptable so the loan was not an issue.