All Forum Posts by: Jasraj Singh

@Jasraj Singh

There is other worst thing, that government may treat you as a DEALER if you're wholesale, but Don't know if F&F is subject to same treatment??

There's a reason why deals (5+ doors) are underwritten based on cashflow, rather than future value.

@Jasraj Singh good advice below, if you are exchanging a rental investment and not flipping check out the concept of “boot”.

Sell houses at a loss and you won’t pay capital gains.

In all seriousness, stop looking at flipping as an investment. It’s more like a retail business in the eyes of IRS. Asking how to avoid paying taxes is similar to a hardware store asking. Get a good CPA, take his (or her) advice, and keep good records so you can maximize deductions. There is no “secret” or trick to pay no taxes on your flip.

Your title mentioned a “flip”.  Not only does a true flip, bought just for purpose of repairing and selling for a profit, does not qualify for cap gains either....profits are taxed as ordinary income plus ss/med taxes of 15.3%. 

You can't use 1031 on a flip unless it was rented or lived in for a time.

Any property bought with the sole purpose of resale is disqualified from 1031.

Theres no way to avoid taxes unless you spend the money on the business, you max out a self directed 401k, or carryover losses from rentals

(I am not a cpa)

@Jasraj Singh you answered your own question. If you take any gains the gov wants a cut you’re going to pay tax unless you use that 1031 to stimulate the economy and buy another property.

Decide on your strategy, target market and property type.  For example, you might want to focus on long term rentals of 3BR SFRs built 1940 or later in a certain zip code.  Build a financial model of your first investment property by estimating your revenue and expenses.  You may want to leverage your local real estate meet ups for information.

Use the MLS, Zillow or your favorite online system to view everything available that matches your criteria. This will give you a feel for what you get in different areas and price ranges. It will be limited though because it is just a computer screen. You will need to actually get into the property to see it live to fully appreciate it. Take special note of the work needed. Ideally, obtain a mentor or bring along someone skilled in real estate to help you identify what needs to be done and estimate cost.

Eventually, you find a property you want to buy and feel like you know enough to be able to make an offer.  Vet the property in your model and contractor network as needed.  Offer on it.  There is a negotiation process that may end in a contract.  From here on, think of it as tuition towards obtaining a bachelors degree in real estate investment.

It seems like you might be at the point where you need to go beyond books and screens and get into the real world to learn more.

@Jasraj Singh I'm looking at which things sell quickly, which stay on market longer, quality of the property, the area, and of course price.