All Forum Posts by: Mike Chira

@Todd Powell

Hey, Todd...that's awesome... You did exactly what I'm planing on doing, but there are still many things that I still try to figure out. 

I'm a new investor... I was blessed to be able to put together about 200k to start investing in RE. I just bought my first property at foreclosure, which I will close on this week. I will probably fix and flip it (Bought it for 75K, ARV $155, Rehab no more that 25K). I worked construction for few years, I even owned a company and I'm planing to do some work myself...

But my end goal is to use the profits I make on flips and reinvest it into buy and hold properties. 

Right now I have a hard time understanding taxes and what entities I should use.

I watched so many videos and asked many people... Some say if I fix and flip I'm considered a dealer so my profit will be considered active income, which means I can't tax deduct it if I reinvest those money into other projects. Other people call flipping short term capital gain and even my CPA told me I can deduct those money...! Now if I can do that I'm thinking why do people use the 1031 exchange?... which makes me think that my CPA is wrong... I'm ok with paying taxes but I need to structure the business the right way from the start... so my question is, how did you do it? You have separate entities? How did you structure your business so you can transfer the properties from the "fix and flip" llc into "buy and hold" llc?

I'm new at it and I'm not sure if everything I said and asked makes 100% sense. But I'm stuck into things that I only need to learn once and it looks like people have different opinions on. 

@David David

Still yet to understand how people leverage and get from 1 to 40-50 properties in one year lol

@David David

Yea... I'm glad I jumped and bought the property without learning everything, cuz otherwise I would've probably quit lol.Now I got no choice but to move on and figure out everything hah.

I listened to this guy, and actually yesterday I bought one of his courses on udemy and listened it to it today... great info

@David David 

Got it... yea I also heard about LLC taxed as a C Corp. I'll look more into it.

Buy yea, with the 1031 exchange you don't pay taxes on profits, but you have to use all the money to buy a different property

@Allan Smith

Will the 1031 exchange work on flips? Many people say it only works on rentals. I do consider renting and refinancing as well, but I need to figure out the final numbers first.

I said 5 flips as an example...it may be 5 flips/year or more if everything goes well. 

When you say that people try to bring other elements into their real estate business, what do you mean?

Hi everyone, I'm a new investor in Augusta Ga... I just bought my first fix and flip property at foreclosure. I will have the closing in a week and then I'll start the rehab. 

My end goal is to buy and hold multi family rentals. So I wanna fix and flip and invest profits into multi family rentals.

My question is, how will this work on taxes? If let's say I do 5 flips this year and I make 20k profit on each...then in December I take that 100k profits and put everything down on a 400k multi family... Will I still have to pay the short term capital gain taxes on the 100k ? 

I did a lot of research but couldn't find anything specific on this. 

I understand that I can do cash out refi or HELOC, and that it something I also consider for the future. Or I can rent it for 1 year and then sell it and do a 1031 exchange, but for my first year I'd rather just fix and flip.

@CJ M. How you refi that quick? Just bought my first property. It's a foreclosure and I'll have the closing next week. Planing to rehab it myself, rent and refinance. What route should I take to have it refinanced ASAP? 

Also I see you got to 20 doors in the first 12 months... That's impressive... how did you do it??