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All Forum Posts by: Mathew Allen

Mathew Allen has started 4 posts and replied 7 times.

Post: Disclosure of property ownership in LLC

Mathew AllenPosted
  • Wholesaler
  • Groton, NY
  • Posts 7
  • Votes 2
Thanks for the reply!  I figured it was better to be safe than sorry but wanted some other opinions to confirm.  Take care.  

Post: Disclosure of property ownership in LLC

Mathew AllenPosted
  • Wholesaler
  • Groton, NY
  • Posts 7
  • Votes 2

Hello fellow investors,

Hopefully someone has dealt with this before. We have flipped several properties. I'm a licensed realtor so when we list them I always disclose that I'm the owner in the private realtor remarks and also in the property disclosure form. After talking with our accountant and lawyer we were advised to set up an LLC to hold the properties that we are flipping. Asset protection was the primary reason but secondly we are flipping in a small town and often find ourselves on the courthouse steps bidding on properties of people we know. All that said, my question is do I need to disclose that I'm a member of the LLC that owns the property when I list it? Thanks in advance.

Post: First foreclosure, typical experience?

Mathew AllenPosted
  • Wholesaler
  • Groton, NY
  • Posts 7
  • Votes 2

Just to give a little background, we've done quite a few deals before and have been successful on every one.  They've all come with there moments but I'm pretty good at putting my head down and grinding away and in the end we always come out ahead.  This deal maybe different however..

On September 20th we bought a home at the court house for $19,000.  Of course we were unable to see the home besides driving by and talking to neighbors.  This home had actually been in my family 20 years ago and I knew at the time of sale (1998) that all the electric had been updated so that was a plus.  We had our contractor walk up and down the sidewalk and scope it out and he gave us a best case/worst case guesstimate bid of 60k-80k rehab.  Comparable homes range from 130K-140K so still a very good deal.  Besides, there is some sentimental value to the house so it's not all about the money, but we certainly don't want to lose money.  

Anyway, it was supposed to be a 30 day close but the referee of the sale was apparently in no hurry and it was around November 15th when we closed.  The day we closed I went to the home but the previous owner wouldn't answer the door.  I left a note explaining the situation, drove around the block and drove back by 5 minutes later and the note was gone.  Waited 3 days, visited her again.  Still no answer so I left another note explaining we were willing to give her $1500 to vacate the premises in 10 days and that she could leave any belongings behind and we'd dispose of them (she was a hoarder).  I said if I didn't hear from her in 3 days we'd proceed with eviction.  On the 3rd day she emailed me and said she had no place to go and that she wasn't leaving.  We contacted our lawyer and began eviction proceedings on 28th.  

On November 30th she was "served" with a copy of the referee's deed and a notice to quit, which she didn't respond to so we asked for a court date.  Now get this, the county in which the property resides had the judge vacate his position so they have no sitting judge and we will not have our case heard until February 3rd.  So our hands were tied, couldn't do anything.  I thought this would pretty much be the most frustrating thing I'd deal with in real estate.  I was wrong.

December 26th, my phone rings and it's one of the neighbors to the property.  She said that there were multiple police cars and ambulances there.  By the time we made it over there it was quite, so I stopped by the village police department to get any information I could.  They told us that the lady had been using kerosene space heaters and that she had severe carbon monoxide poisoning and was unresponsive when they took her out of the home.  Over the next few days we had gotten bits and pieces of information and apparently she survived after multiple surgeries. The fire department contacted the code enforcement officer and he condemned the house because she was using kerosene heat as her primary heat source and it was uninhabitable due to clutter and trash.

On January 3rd, when our lawyer came back to work, we contacted him to see what our options were as we wanted to access the home to shut the water off and winterize.  He said that since she is not allowed back in we wouldn't be "disturbing the peace" so it would be okay but recommended we take a village police officer with us, which we did.  I can't put into words how disgusting the home is so I won't even try.  Any description I come up with would be underwhelming compared to the realty.  The officers that went with us gave us a little more information as they had been in contact with her sister.  The sister said that there were no intentions of her moving back into the home (she couldn't any way because of the condiment)  and that they'd be over last weekend to collect some of her belongings.  We left a note on the door telling the sister to give us a call to discuss the remaining belongings and that we'd be willing to help and to leave any garbage or things behind she didn't want and that we'd dispose of them.  The note was gone yesterday but everything is still on the property.  

Sorry this was such a long post, but this is where we stand at the moment.  I'm frustrated with our lawyer, the situation, and for the fist time in real estate I feel like putting my head down and grinding isn't going to work.  Any words of encouragement or similar experiences?  

Pictures of the home

Post: Tax Question for REA/FLIPPER

Mathew AllenPosted
  • Wholesaler
  • Groton, NY
  • Posts 7
  • Votes 2

Thanks everyone, my wife just set an appointment with a CPA from her workplace. Better safe than sorry.

Post: Tax Question for REA/FLIPPER

Mathew AllenPosted
  • Wholesaler
  • Groton, NY
  • Posts 7
  • Votes 2

Hello, just starting my tax return for the year.  I realize I may need to go the route of a CPA, but I'm trying Turbo Tax first and looking for advice.  

My question is this:  I'm a part-time real estate agent/investor/flipper.  We flipped our first house this year netting a profit.  We owned the house 11 months, so it's taxed as short term capital gains (ordinary income).  Can I claim the income from the flip, as well as commission from the few houses that I sold this year under a business separate from my normal W-2 income?  Basically this would allow me to take advantage of the home office deduction and several other deductions to get the taxable income down.  Thanks in advance!

Post: $0 debt, 800+ credit score, no lender will help

Mathew AllenPosted
  • Wholesaler
  • Groton, NY
  • Posts 7
  • Votes 2

That seems strange that they won't let you take out an auto loan on the truck?  If their is no lien on the title I don't see why a bank would have a problem loaning 15K on a 35K truck.  Perhaps try a local bank with less strict policies and underwriting? 

Post: New Member

Mathew AllenPosted
  • Wholesaler
  • Groton, NY
  • Posts 7
  • Votes 2

Hey everyone,

New member here, already learned a lot by just lurking for awhile and figured it'd be a good time to join and try to learn more!

Background:  I'm 35, NYS Real Estate Salesperson, Accounts Payable Specialist at a local power plant (scheduled to decommission in 2018) , and Amateur flipper. With the end of my current full time job in site, I figured it'd be a good time to start the foundation work for a full time career in Real Estate.  When I was 22 I bought 20 Acres of land in rural Tompkins County, NY and GC'd my personal house on it.  I've always been interested in Real Estate as a hobby and my uncle owns a local Real Estate company so I got my license about 5 years ago.  My wife also manages the mortgage underwriting department at a community bank.  Last year we decided we wanted to try our first flip.  The numbers looked like this:

Purchase Price:  $60,000

Rehab:  $40,000

Comps: $150,000

We used the equity in our house to fund the flip and the project was slated for 6 weeks.  We stuck tight to our timeline but went over budget a bit.  We planned on re-finishing cabinets but a trip to Ikea and we ended up with new.  We also added granite countertops.  We listed the house at $165,000 and had over 10 Showings in 2 days.  Then something interesting happed.  Another agent from my office contacted me about my personal house (we had been floating around the idea of selling and building another since our family was growing).  We ended up selling it with 5 acres (keeping 15), but needed a place to stay so we pulled the flip off the market after 2 days and moved into there over the winter as I GC'd the building of our new house on the remaining 15 acres of land.  We relisted the flip and sold it for $156,000.  We made about $31,000 after closing cost and commissions. 

Now that the family and I are getting settled down into the new house, I find myself getting the itch to do another flip or possibly start investing in some rentals so that I can put myself in a good position when my full time job comes to an end in a few years.  Anyway, sorry for the long post!  Thanks for the great articles and information, I look forward to learning more!