All Forum Posts by: Jonathan Berry

Thanks @Jason Wray!!

That’s a good point. While most of the properties I’m currently looking at tend to be superficial, this business does run the risk of encountering issues that are unforeseen. 

I am planning on leveraging debt to fund this venture, but your point is valid and well-considered. 

Do you have any experience with utilizing financing for properties at auction?

My name is Jon. I’m a father, husband, and friend first and foremost.

My career has been primarily focused in a sales capacity, most recently in the enterprise Software-as-a-Service space. I have specialized in complex selling environments, solutions, and organizations, involving multiple stakeholders. Having to self-source deals has made me quite proficient in prospecting.

Leading discovery meetings has taught me how to be genuinely curious, ask the right questions, and qualify through disqualification.

Presenting solutions that align to key organizational initiatives has taught me to form hypothesis and bring point of views that pique curiosity and interest, as well as having a strong opinion that is loosely held to facilitate genuine conversation.

Navigating procurement has taught me the art and science of negotiation.

All of this has led me to now desire to focus these skillsets into the business of real estate procurement and investing.

My goal with real estate is to build generational wealth that I can share with my family and pass down to my children.

The strategy to get there is to use my own capital towards fix and flips to create more cash on hand to eventually begin buying and holding real estate to not only build net worth, but leverage debt to continue investing, and have others pay down my liabilities as I build equity.

I’m open to connecting with anyone in this space as my network is limited currently. But ultimately I’m hopeful to learn from others to eventually pay that forward and do the same for anyone hoping to make the same transition I am.

I have what I think is a two-part question.  So here is the scenario and hopefully it makes sense.

If someone were coming into money from the proceeds of their primary residence (qualifying within the 3/5 years occupancy exemption) I've come to understand that there is a $250,000 exemption for the sale that I can utilize and essentially not pay taxes?  T/F?  

Given that I have owned the property since June 2014 and it will have been rented for 11 months of the 46 total months of ownership (the last 11 months), I have come to understand that I will be essentially be "prorated" in my time of rental versus ownership and that amount would be deducted from $250,000 exemption for sale of personal property (ie. 11/46 = 23.9%; 23% of $250,000 = $59,750; $250,00 - $59,750 = $190,250).  So as long as my total proceeds don't exceed $190,250, I can essentially claim the exemption and not owe taxes on that money?  (I understand the money from my rental income will be taxed accordingly and minus the depreciation I can claim and other related expenses, I'm ultimately responsible for that tax liability).

Let's say the sale from a property would gross $150,000 before any payments of closing costs or agents fees, and after all required fees, taxes, etc. were settled, the net amount was $120,000, What number does the tax liability come from (may be a stupid question. just wanted exact clarification) the $150 or the $120? And is the above scenario true? Is that the way the personal property sale exemption works? If not, how does it actually work? And what is the maximum tax liability I met have on the sale of that property (excluding all other factors like personal income and such)? If I take the proceeds and use some for personal debt and take the remainder and invest in my own LLC to start buying and improving more properties, what does that mean? What exemptions do I have at that point?

I guess it's more than a two-part question.  But I'm willing to do what's necessary to get with a licensed CPA for a consult.  I have more than a few questions.  But hopefully someone can answer a few of these to get me started.  

Thanks in advance.