All Forum Posts by: Matthew Shay

Not sure which category to post so hopefully this will be fine. This past year finally completed a land flip that I partnered with my family. I provided sweat equity and they provided funds. The property was sold in Feb but only now did I receive the tax appeal refund from the county. I committed to splitting the refund check of my own determination with the partners so that is what I intend to do. My only question is whether this is a standard practice or am I just being generous? We did not have anything written up for doing the deal and it can be considered a verbal contract

Selling real estate in south carolina and not a resident but there is a withholding tax (7%-10% of the gain) If the gain is $10,000 are they withholding the whole amount or just 7%-10% at the time of the sale? What is the amount being withheld if we are an LLC which I elected as an S-Corp for tax purposes?

Can the gain on the sale be deducted if I consider myself as an employee who is being paid a salary? If I consider it this way then we are losing money.

Should I change our tax status to just LLC without S-corp because it makes it more complicated and not economically advantageous?

I am not sure if I added my sister or not to the LLC through the IRS, how to find out?

@Simcha Davidman @John Underwood Thank You for your sharing. I spoke with an attorney that I used before and he confirmed that these contract terms are possible. The seller would enter into an Escrow Agreement with the buyer and Escrow that would outline the terms of the $30k of proceeds put into escrow

I have a vacant lot for sale and the next-door neighbor is interested in buying only they are interested to offer less because of fill dirt and drainage issues. Based on my research the total costs to solve this issue is $30,000 maximum but possibly less. I had a talk with a reputable local builder who told me that it's possible that the additional costs to build this lot might be significantly lower if the HOA deals with these issues. It is questionable whether the property owner is truly responsible for these costs because there may be some negligence by the HOA for creating this problem

I would like to propose to the neighbor to enter into a contract for the sale of the property with the following conditions: $85,000 at closing but only $55,000 of this amount will be released to the seller immediately at closing. The remaining $30,000 will sit in an escrow account by a 3rd party and only upon the final receipts of the costs for the fill dirt and drainage issues will the remainder of the funds be released to the buyer. Anything remaining of the $30,000 will be credited to the seller

In addition, the buyer agrees that the seller has 90 days to rectify the issues with the HOA and any other responsible parties. In the event that the responsible parties pay for these issues then the $30k in the escrow account will be credited to the seller

A couple of things I would like to find out. Is this considered a type of construction holdback and if not what name is there for this kind of deal structure? I have seen terms such as Working Capital Hold Back, Earnout and Reverse Earnout which is used in Mergers & Acquisitions and wondering if they can be applied in a land sale. Finally, this will have to be approved according to state laws in the great state of South Carolina

I have a vacant lot for sale and the next-door neighbor is interested in buying only they are interested to offer less because of fill dirt and drainage issues. Based on my research the total costs to solve this issue is $30,000 maximum but possibly less. I had a talk with a reputable local builder who told me that it's possible that the additional costs to build this lot might be significantly lower if the HOA deals with these issues. It is questionable whether the property owner is truly responsible for these costs because there may be some negligence by the HOA for creating this problem

I would like to propose to the neighbor to enter into a contract for the sale of the property with the following conditions: $85,000 at closing but only $55,000 of this amount will be released to the seller immediately at closing. The remaining $30,000 will sit in an escrow account by a 3rd party and only upon the final receipts of the costs for the fill dirt and drainage issues will the remainder of the funds be released to the buyer. Anything remaining of the $30,000 will be credited to the seller

In addition, the buyer agrees that the seller has 90 days to rectify the issues with the HOA and any other responsible parties. In the event that the responsible parties pay for these issues then the $30k in the escrow account will be credited to the seller

A couple of things I would like to find out. Is this considered a type of construction holdback and if not what name is there for this kind of deal structure? I have seen terms such as Working Capital Hold Back, Earnout and Reverse Earnout which is used in Mergers & Acquisitions and wondering if they can be applied in a land sale. Finally, this will have to be approved according to state laws in the great state of South Carolina 

@Arthur Thomas Can you share what happened with the land you were selling? Craigslist is really good for selling cheap land but if you are having trouble selling I would also consider an absolute auction. It can be online or in person. John Dixon & Associates is a good one to look at. Another idea is to open up a free account on nextdoor.com and you will be exposed to your entire community including all the neighboring owners who also opened an account and you can contact them directly. Let me know if I can be of any assistance

I know this post is old but I just wanted to put my 2 cents. Have multiple builders go with you to the property and get an assessment of how much it will cost to build. Each area has a certain range or $/sq ft for building. As already mentioned there are various websites to start your due diligence when looking at a land property

A little outside the box but check with the county or town websites they usually have what's called a GIS map and don't be afraid to contact the GIS expert analysts for expert advice if you ever run into any issues. Also if it is a planned development or HOA community you can also find out lots of information from the formal planners including civil engineers who helped plan the community who have further details including original documents that the county or town may not have

Also, government offices such as DEHEC, US Army Corps and DNR are all valuable resources if you ever have any issues that relate to wetlands and they will conduct an investigation for free if it is required and you submit a request. 

Bottom line there are endless resources out there including the wealth of knowledge on this site. 

What are the license requirements to be a debt or equity broker for multifamily deals nationwide? I saw somewhere that for being a debt broker many states do not require but some 20 states do. As for the equity broker, I heard it is somewhat of a grey area. Would appreciate if anyone here has some more insight in this area

I was searching the BLS website for current and projected job growth by city but instead it is showing by occupation. I called and spoke to them and they told me they only have national data and you can go to projectionscentral.com which has job data but it is data that each individual state is providing. I hear from many sources that the BLS has this job growth data but where is it supposed to be? Am I supposed to be looking at something else? They do show unemployment but only by state. I heard a great recommendation today called bestplaces.net under "Job market" when you search for a specific city or zip code. This website scrapes information from many governmental and major national organizations (including bureau of labor statistics) I want to cross reference the data I am finding there with BLS or something else. Anyone else using bestplaces.net and care to review? Is it reliable?

I am having the same issue searching on the BLS website and not finding the cities with projected job growth and highest job growth over the past 2 years. Were you able to find this info @Neil Schoepp