All Forum Posts by: Junior Francica

Hello everyone, made a post on here already about doing my first flip so wont get into the details about it. 

Something that I have been trying to figure out or learn is, what are my options with what to do with profit from the flip in terms of taxes. 

How much of the profit will be due on my taxes (generally speaking)?

Is there something I can do with the profit to not pay taxes on it? would a 1031 apply and be an option? 

Any help or direction would be greatly appreciated. Thanks!

We haven't spoken about the 20% terms and yes would need to confirm with the bank that they allow that second position. 

What do you mean by using another property as collateral? 

 I am renting an office space inside the building. Utilities are included but we pay for internet and our common space which just includes bathrooms are maintained by sellers and yes we clean our own office. 

There is a current tenant that is a property management company which the seller has a deal for a cheaper rent but they provide all the property management for the building so there would be less management on my part. 

Rent in this building is significantly lower than anything around from what I remember when searching for office space. Anything else I was looking for was double or much more so definitely has the potential to raise rents although aesthetically speaking work needs to be done.

Gotcha, good to know about owner-occupied commercial financing.  

 As far as my understanding goes, the owner would put the 20% the bank requires and take a second position so not technically 100% as far as the bank is concerned. But yes doesn't seem to make sense with the cash flow being so low not as good of a deal. Appreciate the feedback.

Yes the commercial space right now is very uncertain which is why I am looking for some advice as its not what I typically work with so appreciate your insight. Thats a good point to have purchase contingent on re-newing leases. 
It is an office building for small businesses and on the cheaper side, currently 100% rented. When I was looking for office space nothing out there was as cheap as these office spaces but also not as new and nice as other places. I believe they typically do 1 or 2 year leases so even if they made everyone re-new their lease it would still end in a 1-2 year span. 

Not sure I would want to stomach long term vacancy though, that is the main issue if it ever came to that. 

Hey guys. I am a residential agent but have very limited knowledge on the commercial side of things. I have a commercial building that I am considering purchasing. It is the building that I am currently renting an office space at. The owner is willing to sell and here are the details. 

Sales price 950k, the owner is willing to take a second position on the down payment the bank would require so let's say 20% second loan position for the owner. 

The yearly rental income is $126.9k

Expenses are 48k

NOI is 78.8k

7 tenants are locked in until 2024, 5 are month-to-month, and 2 have leases ending by Dec of 2023. 

Built in 1991 and would say it doesn't need anything major repair at the moment. 

Any other info you may need please let me know, would this deal be worth it?

Thank you everyone for the input. No issues with the roof btw. Appreciate all the feedback!

I am an agent. It can go either way, I personally don't think it needs to be replaced as wont add much (if any) value to the home besides aesthetics which can help with sale. Some investor clients we have helped buy and sell their flips have done both options sometimes it works and sometimes it doesn't. Just wanted to see what seasoned flippers typically do in this situation.

Hey guys appreciate the insight and help. 

Got into my first flip and just started the rehab work. The roof of the home was redone about 5 years ago so no issues with the roof. In the original plans for the fix, the roof wasn't calculated but have already been able to save some cost in other areas and now the contractor asking if we want to have the roof redone as siding and gutters get redone because its asphalt shingles (believe that what type), essentially just really ugly. The Contractor is a personal friend and already said they would do it at cost if we wanted to add it on for 5-6k total. 

My biz partner also considering it for aesthetics and resale.  

Have you guys ever redone the outside of a home and not the roof and regretted it and vice versa, ever redone the outside AND the roof to look better and been glad you did? any insight would help. 

 What have you invested in Memphis? rentals? Just starting my first flip here in Chatt and even though it's a little harder to find, still a lot of great flip opportunities.