All Forum Posts by: Hussein Al-asadi

I'm not positive how it would all play out, and I wouldn't want to give you improper advice. It's definitely something to find out, but maybe you could ask a real estate tax/accounting expert like Steven Hamilton II (on BP).

 That's the same question I've been asking myself the last year :p Still super fun though.

I recommend: save 10%, donate 10% to charity, and spend 80% of the money on the things you and your brother truly enjoy or have always wanted to do.

@Hussein Al-asadi

The tax return was mentioned above. This is something to pay attention to, and you might want to research FIRPTA (Foreign Investment in Real Property Tax Act). Basically, since you are a foreigner, when you sell a property located in the U.S., 10% of the sales price will be withheld so that the IRS can ensure that they are able to collect any taxes that you owe from the sale.

However, there are exceptions. If you sell a property for $300,000 or less and the purchaser (or a member of their family) is an owner-occupant (meaning they plan to live in the property for at least half the year, for the first 2 years after purchase), then no money needs to be withheld.

In consideration of this, it might be wise to focus on SFRs with ARVs no more than $300k.

Keep in mind that you are still required to pay proper taxes from your real estate deals for each year, but you just wouldn't have to worry about the IRS withholding the money from you ahead of time. Otherwise, this could obviously largely cut into your ability to maximize your profit.

I bought mine while living in China. Once you find someone you trust it gets pretty easy. You might need to file a tax return in the state you own the property in. This is not the same thing as the property tax listed with the property deals you see. I have to file a state tax return in Minnesota (where my rentals are) and pay a small amount in income tax there even in years I never set foot there.

Mark

 Ask the flipper/investor to put up collateral. Record a lien on a completed project that he is holding. This might simplify the process as the flipper could use the money for multiple deals without redrawing paperwork and liens for each new deal. But still pay you your share as each deal is done.

 Definitely use an attorney for any deal with someone you've not worked with before. 

@Hussein Al-asadi If you're lending the flipper $ to purchase the property the attorney should record a mortgage lien.  The money doesn't go to the flipper, it will go to the seller.  The flipper will own the property but you'll be the bank w/ a lien. 

If you're providing the funds for the renovation you can escrow the funds w/ an attorney and/or Title company which will only provide funds to the flipper  after inspecting completed parts of the project.  The flipper or GC may say funds are needed to get started.  Some private investors will provide $ to get started & hold back the remainder until parts of the project are inspected & complete.  Your money- your rules. 

@Hussein Al-asadi  I guess the rule of thumb is those who provide the cash make the rules.  Your money, your rules.  Everything is negotiable.  

How do you get the deal done from Sweden?

• Find a real estate attorney in the city where the flip's occurring
• Draw up a Joint Venture agreement or have the attorney draw it up; 
• Have the flipper sign the agreement.  The attorney could record the agreement, a mortgage, a notice of interest.....  All depends on the state
• Escrow the money w/ the attorney to support the flip 

There's naturally more detail but this is the route I would take.