All Forum Posts by: Landon Sheveland

@Landon Sheveland People do fix and flips while living into the property to classify the property as primary residence and not pay any capital gain taxes. if that is your intention, don't use LLC to establish this as your LLC.

If your goal is different compared to what I said above, you can use LLC. LLC without S-Corp status will not give you any more tax advantages. Do you need an S-Corp depends on your overall tax situation and profit you are expecting form this flip.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

 Mistakes I see people make is they plan on living there a short time and over renovate the property where they will never get the money they put into it back. 

Another is they customize the property to their liking only. This is perfectly fine if you are going to be living there a long time, but I see people who use a home as a stepping stool home to a larger home in future and make it very customized to their liking but then when try and sell it, it does not appeal to the masses.

For your first one don't bite off more then you can chew. I see this pretty commonly in Phoenix as there already will be obstacles you didn't plan for along the way. I have many clients buying the older homes in North Phoenix near the north 101 as they are 20-30 years old, in need of updates, but also are poised for the long term growth from TSMC and other business/economic activity in the area. 

Hi Landon, hope everything is well. It sounds like the property will need a lot of work, if you need any help with the project i can help. I am a Painting contractor and can help with any of your needs. 

Finding a good script or preparing one will likely help you with this endeavor. If you need one, let me know. Highly recommend calling them as any other message is likely to be ignored.

One thing to think about is the age of the home. If it was built before, say, 1960 there may be a slew of electrical work you'll need to do to stay in regulations with current times and, of course, for the safety of a future buyer.

We had a project which has hit several bumps in the road due to contractor reliability or rather lack thereof. Be sure to check their licenses and if they have reviews. Go ahead and be willing to put in the money toward a good contractor if you're not doing the work yourself. We made the mistake of thinking the person who charged less was the better option, however in the long run we spent more. Learn from our mistake.

Make a good connection at your home improvement store/outlet whatever it may be. They may have ways of offering great discounts. We have saved a ton with our connection.

Expect various delays and try to account for them as much as you can. It could be permits or some issue with the contractors which could all add to your holding costs. I'd overestimate what it will cost and the amount of time I think the project will be by at least a month to give yourself some cushioning and an idea of the margin of error you have in order to earn money.

I'm guessing you also have checked for the ARV and what houses in the area are selling for to help determine if it's worthwhile.

These are off the top of the head, so if I come up with more I'll respond again. I hope this helps and others will add more.