All Forum Posts by: Jered Collins

Be careful. I'm currently waiting to see if the seller signs off on my contract.  Titling on auction properties is always a headache.  I might have lucked out on mine as my titling company I hired ran a preliminary report and found no issues with the title.  The other issue I'm dealing with is that the property is a foreclosure and there is still tenants in the property.  The contract was written were I'm responsible to claim possession of the property.  If all goes well I'm position to make a pre-tax profit of 35-40k on this property.  Time will tell though after I can get an opportunity to inspect the inside. 

I just backed out of a contract yesterday due to the unexpected cost and work that showed up from my due diligence inspection. Seems like the market I'm in all the good deals are getting shoveled to established investors and the scraps are sent to the MLS. I'm just wanting to do one, maybe two flips a year.

I check MLS, craigslist, and different wholesale websites daily. I'm thinking of taking a different strategy on my approach. I've been looking for the cheapest price per square foot which is leading to me to a very competitive market with other investors who have more resources and efficiencies to take on the projects. I really want to stay mostly cosmetic (I do have a good HVAC connection).

Anyone have any tips or suggestions maybe having dealt with a similar market I'm in?  

Did you gross 20k or net 20k profit?  Meaning after you accounted for around a 40-50% tax reduction for corp. and SET.  

just got quoted for a 1100 sq ft home (excluding trim painting) for $1500 including materials 

Put in 3 offers and got one accepted. Back out of the contract after inspection period. Now I'm on the market looking again 

 No more than 3 this year.  Is there an exemption under 4?

 Hypothetical way of looking at this... If I made $30,000 pre-tax net income and I paid myself out of that profit 10% ($3,000)... would I only pay SET on the $3,000?  Would the IRS see the remaining $27,000 as net-working capital needed to run my business?

 Could you expand possibly on the potential 15.3 FICA taxes that I might have to pay?  Does it make  a difference whether or not this is not my primary source of income? 

I'm interested in this subject too.

Just went under contract today on a house in Richmond, Va.  It's located in the South Richmond District of Richmond, Va.  

To the facts...

4 BR 3 Full Bath

2,497 Sq Ft

Two story brick traditional 

Contract Price = $70,000

Realtor Fee @ buy = $3,000

Realtor Fee @ close = $4,900

Closing Costs = $2,100

Holding Costs = $5,700

Estimated Repairs = $35k

AVR = $160,000 + 

Estimate Pre-tax Net Profit $38,000

Question, what tax rate do I use for this property if I'm fixing and flipping less than 6 months.  I'm in the 28% marginal tax bracket now.