All Forum Posts by: Jacob A.

@Marcus Porchia

Very very very few flips go less than 90 days in total from buy to rehab to sale to closing. You have to figure your average flip is going to take anywhere from a few weeks to a few months to rehab and the closing process on the sale side will take anywhere from 30-60 days (if getting traditional bank financing). All in all, if you can buy a home, rehab it, sell it and close on it in under 90 days you are a champ in my book. So to answer you question, yes it is worth it in most cases but it all comes down to the numbers. Budget for 6-9 months of holding costs and see if the deal still works. If it does, you have a winner.

@Sharad M.

This looks killer. I couldn't help but smile all the way through the pictures. Hopefully there's nothing major going on and its just a serious cleanup job and you can make some serious cash.

@Andy Luick

I appreciate the advice and time you spent going through this. I'll definitely take your advice and run with it. I definitely need to jump on a marketing campaign in some shape or fashion but just haven't found the time to get it going yet. It's tough working 55-60 hours a week and getting this real state venture going on the side but I plan to find some more time for it in the future.

Thanks guys. Hopefully closing will go through without a hiccup and I can move along to number 2.

Update for the folks still following:

We are under contract as of this morning! I'll post the full breakdown once we close but as for now I can say its a very strong offer and will close sometime around the end of March.

I didn't say the cap gain exclusion had anything to do with this transaction but it has everything to do with the transaction when he sells his primary residence down the line. He's buying a primary residence with private money, refinancing to a traditional mortgage and living in it. Atleast that is what I'm gathering from the info. There is zero tax liability on this transaction and won't be until he sells the home to another party that is not himself.

No you can't make or lose money dealing with yourself. Your basis in the home will be the purchase price and whenever you sell it to another party you will recognize a gain. However, it sounds like it is going to be your principal residence so you will be eligible for a $250,000 ($500,000 married filing joint) gain exclusion which basically means if you have a $250,000 or less gain, or $500,000 if you're married, on the sale of your principal residence then you pay no taxes. To qualify for this exclusion you have to live in the home for 2 out of 5 years I believe. If you move before the 2 years, then you will have to pay taxes on any gains incurred.

@Robert Bystrek

Congrats on the sale! The timing seems almost too perfect..... Best of luck in the future to you as well.

You can always go to the IRS website and grab a hold of a Schedule E and the instructions for Schedule E and start reading.

What are you plans for the property? You've only mentioned acquiring it. Are you looking to rehab it, hold onto it and rent it, wholesale it, etc?