All Forum Posts by: Michael Delmont

@Rachael Luce-Ogle the group is still active and having a meeting this evening via Zoom.

Check out Kalamazoo Real Estate Investing Club http://meetu.ps/c/2xn9v/3MBG0/d on Meetup

I just closed on the sale of a property in IL, which has to be done through a lawyer. The lawyer provides the title company with all of the numbers as to who needs to be paid and what the amounts are. The property is a condo and last year there was a special assessment levied ($600 a year for 2020,21,22,23). When I purchased the property in Nov. I paid the 2020 special assessment of $600. At or just prior to the closing, my lawyer finds that the buyer's lender hasn't figured this special assessment into the loan. Instead of contacting me and telling me of the problem, he decided to give the seller a concession of $2,250 to cover all of the special assessment through 2023. He didn't even tell me after the fact and the only way I found out was through auditing the Closing Disclosure. So, basically, the lawyer gave away $2,250 without asking or even having the courtesy to tell me about. 

How would you handle this? What recourse might I have?

@Eric Smith I used Anchor Loans. I'm not sure about their minimums, but they do have a representative l, Alex, in town.

You might try Amerifirst Mortgage. 

Yes. This is the way I've done it with my other business. Even if I put inventory on a credit card or took a loan to buy inventory I've counted the expense in the year I paid the supplier for the goods. (My other business is selling lamp parts for retail). The only thing that would be different is since I don't do $1m in sales each year I don't record my inventory. I can see where recording my year end inventory in regard to the property will effectively do the same thing as Ashish suggested in not claiming anything until the property is sold. I feel much more comfortable claiming the purchase in the year it was made and also claiming the held inventory. Once the property is sold it will be removed from the held inventory and show the expense (2019 end of year inventory $123,201 - 2020 end of year inventory 0) and this will create the expense to offset the sale profit.)

So, even though I made the purchase and the cash went out during the 2019 tax year, I don't report it until I file for 2020?

@Nicholas Burrell

I'm in Battle Creek. Fairly new myself.

@J Scott

I am going to disagree here. If the person that is installing the tile is a professional, why should I as an owner have to stand over them every minute to make sure they are doing their job correctly. If I have to hold their hand to do the job I don't want them working the job.

The written, tested, explained directions of which tile to use should be sufficient for a professional.

I apologize if this has already been asked:

I purchased a condo in 2019 to flip using hard money and it will sell in 2020. 

Do I enter the full purchase price in my Cost of Purchases or just the down payment on the Schedule C?

Thank you

@Robin Casper I have heard of other agents doing this; when we bought our primary residence in 2009 it was a short sale that was being rented by the agent. One key fact is that the bank doesn't own the property during a short sale the mortgagee does until the property is foreclosed upon.

Many times the owners will move and hire the agent to sell and maintain the property during the short sale process. Since they are upside down in the property they don't care about the disposition; they are just out of the property. Banks frequently require the property to be occupied during a short sale abs renting it out fulfills this requirement. Vacant properties also are targets for vandals and squatters, and often require special higher rate insurance.

The program with this arrangement is agents lose the incentive to actually show there property and present offers. They stand to make much more money on the rental than the commission for selling.