All Forum Posts by: Jessica S.

Most flips aren't eligible for 1031 exchanges.  If anything income from flips is taxed at a higher rate than rental income.  Money earned from flipping houses is considered to be income from self-employment and is taxed accordingly

I don't think an LLC would offer much of a tax advantage, unfortunately (I could be wrong about this). My understanding is that an LLC is merely a pass-through entity as far as taxes are concerned.

Hi Amy,

Welcome to Bigger Pockets! 

I noticed that you said in another post that  you were considering doing a 1031 on your duplex.   As long as you've owned the duplex for at least two years you shouldn't have to pay any capital gains tax.  You would be exempt from paying tax on the proceeds since its your personal residence meaning that there's no need to 1031.

Good luck finding your next property : )

Steve Harman

http://www.harmanappraisal.com/

I once read an article about this that was geared towards homeowners planning to sell. It said that the single best ROI would come from a fresh coat of paint on the front door.

I guess your next step should be to talk to a mortgage broker to find out what's possible.  I know a really good one that's based in Vancouver.  I can give you his contact info if you're interested.

BTW, I recently found out that the term HELOC only refers to loans on your own residence. Learn something new every day : )

@Jeff G., this sounds like a great strategy for other parts of the country.  But unfortunately it isn't possible to purchase anything for under $50k in the Portland area.

@Drew Mim Mack, do you own the home you live in?  If not, you could start by purchasing a duplex and living in one side while you rent out the other.  You'll qualify for better financing since it will be an owner-occupied property. 

 I would consider this to be a house warming gift which may explain why sellers aren't as likely to receive anything equivalent.

 I received a beautiful Pendleton blanket from my agent.  I thought that was a nice thank you for all the business I'd given her in the past year.  (Then I got licensed so I guess I won't be getting anymore blankets...)

Someone mentioned receiving a check as a gift from an agent.  In Oregon, this is considered commission sharing which is illegal, although I think this varies from state to state.

I would say gifts and thank you notes are a smart practice.  They will leave your clients with a positive impression which is so key for referrals and future business.  

@Octavia D. , stop texting and start making those calls!  It might make you uncomfortable at first (you might even be terrified!) but you don't have to let those feelings stop you from taking action.   

You can do this : )

 This does seem to be the conventional wisdom on Bigger Pockets.  But I wonder about this in the long term.  What if interest rates rise precipitously?  Is it possible that lenders may start looking for a way to free up funds that are tied up in low-interest loans such as the ones that are being issued now?  If that were to be the case exercising the Due on Sale clause might become an attractive option.  

Just a thought.

When we partner on a flip, each party's expenses are first reimbursed from the proceeds of the sale.  The remaining money is the profit and is divided equally between the partners.

In your case this would mean that the down payment would be reimbursed and then the remaining funds would be split.

Your post is a little confusing but I think this is what you're asking, right?

I hope your property sells soon!