All Forum Posts by: Mike B.

Hi all, long time no post. I am buying a small piece of land FSBO. I figured I could find a generic contract somewhere. I don't plan on engaging an agent I did a similar (not exactly) transaction 20 years ago and recall it wasn't too hard. So, I need a contract, I assume I will do a title search, have the land surveyed, hire a lawyer (I have one through work that will do RE stuff) to deal with title transfer and filing or is that someone else?

Any help appreciated.  I am paying cash and want to get the seller a contract and good faith deposit this weekend.

Thanks all!

Thanks Chris I am familiar with the creation of the depreciation base so thinking of it that way, I guess that is how the Jan-Nov timeframe activity is 'accounted for' froma  2014 tax perspective.

Thanks all.

Yes, I signed a rental agreement adn advertising began December 1.  Im not so much concerned about that time frame as I am curious about January 1 - November 30.  During that period, I owned the home and incurred a variety of expenses improvements and holding, etc.  That is what I am trying to get my head around prior to tax season if not for curiosity above all...

Steve - yes in my name and I have a full time non-real estate job. Starting the transfer to an LLC discussions now with bank (have had the LLC for some time but no activity).

Hi All,

First off, I will consult my tax professional before doing anything.  I am looking for the 10,000 foot summary to get my mind around what I will be looking at when its time to tackle this.

I bought a fix and flip home in 2013.  Renovated, tried to sell, then decided to rent it late 2014.  It officially went on the rental market December 1, and was rented immediately with the tenant paying partial month for december.

I believe from the rental income/depreciation/expenses standpoint that starts as of December 1?

What is done from a tax perspective from Jan 1 - Nov 31, 2014, if anything?

- I incurred significant renovation and holding costs through that period.

Is this considered "converting" a home to rental (as of 12/1/14)?

Thanks for any input!

Joe: My point is some people are much better at sales than others, and I would seek to take advantage of that fact. Price is irrelevant to the question at hand, since when making a comparison of good sales skills/resources/abilities vs. not as good, one should assume "all else constant". That aside and taking your comment on its own...yes I, and I assume most others, agree whole heartedly that if it's priced right it will sell.

Wayne: I am not an agent and you are, so this input is helpful. I didn't realize that the buy commission entails so much more work to earn vs. the sell commission. Taking this into consideration with the "anticipation of handleing the sale" or other expectations or assumptions that were in no way implied by me, the owner/investor, but possibly presumed by the agent, I need to think about this some more. At a minimum, as I stated, I will consider being more up front. If the agent is only willing to work for both the buy and sell commission and the money earned on the buy commission is not worth his time, maybe I need to find another agent if this is the path I pursue.

It is the sell side to me that is worth paying for a sales commission (regardless of what side of the deal is paying for it). I am sure everyone is different but I have no problem "shopping" for properties, viewing properties, running comps and doing my business decision analysis and if wasn't for the fact that I have to involve an agent I wouldn't. It's the sale I want nothing to do with.

Thanks again and any other input/experience would be appreciated.

I am nearing the end of my first flip and I have planned all along to use a different agent for the sell vs. the buy. I may not continue this way, but it is my plan for this project. My reasoning is to 1.) get a taste of two different agents from the perspective of flipping (I've bought sold my own homes several times) and 2.) try to get agents with more aligned specialites...i.e. my buy agent has lots of investment experience, foreclosures, etc. and is an investor himself. For sale, i want someone that can sell ice cubes to eskimos and maybe even specializes in the area and demographic (for example first time home buyers or young professionals looking to expand/start family or price range etc. etc.). I believe this is sound from the business side of things, but is it ok from an agents view? I never gave any indication tot he buy agenet that I would use them for the sale listing. In the future, I may be more upfront about this. Any thoughts or experiences?

The vets here are well aware of this and its often mentioned in the volumes of educational materials everywhere. It was no sprise to me, even though this is my first flip project, because i have hired out for dozens of projects on my own residences. For those just starting out or planning on rehabbing, hopefully its helpful.

I thought I would share some real, current examples of the variances in job bids from contractors. The following bids are for work in central VA. The actual work request and bids were for the same house, the same exact job/material request for the most part:

Replace Roof (5 bids). 3600, 3800, 4600, 4700, 6110

Upgrade Electrical Panel to 200A (5 bids): 950, 1185, 1250, 1400, 1400

Vinyl Siding (3 bids): 6500, 11000, 12650

Replacement Windows (2 bids): 5600, 7500

The range for the combined work for these 4 jobs alone is over $11,000.

This says nothing about the quality of the job that will be provided by each contractor, but as stated it is all for the same house, the same work request, and the same or comparable material/grades. All contractors are licensed, insured, have have no negative feedback trend that I could find (my own criteria).

The lesson for those new to rehabbing: spend the extra time to get multiple bids for the work you are farming out!

Mike

on a rehab sf flip....are there any thoughts, marketing data, or insight on what sells better as far as the colors of common asphalt shingles (black, grey, tan, reddish...)..?

In the "it depends" answer category, should i stick with whats common in the 'hood, what the best looking homes in the 'hood have (i am tending to favor this), or something else?

Thanks for your thoughts...

Thanks for all the good words. As I look back on it One observation I have is the quality people involved. It helped so much to have a good local bank doing a business loan, and their choice of title folks... It didn't matter to me but they worked together so well.

Its been mentioned already but patience was key.

Can we see membership locations, instead of website visits (google analytics)? Website visits on a topic like real estate will surley follow population.