All Forum Posts by: Mike Miller

Hi All,

I’ve been tossing over in my mind my current situation. I buy SFRs and use the rent-to-own model with them. My model is a little different in the sense that I treat the house more like a rental. Here’s a few examples:

1: I don’t require a large upfront non-refundable down-payment.

2: First and last months rent & security deposit are all that is needed to move in.

3: No penalty for the tenant moving on.

4: After they are approved and moved in, we pair them up with a credit repair service and local mortgage brokers.

5: We have a non-verbal agreement that we are willing to sell the house to them in 1-3 years after moving in for the appraised price at time of purchase.

I have a CPA but wanted a second opinion.

If I consistently sell homes to people that have been renting them for 1-3 years, would it be safe for it to be taxed as capital gain? Or is that viewed as an inventory situation instead and taxed as income?

Secondly, I have someone that came to me that may be pre-approved for a loan. If I decide to sell it to him upfront before he even moves in, I changed my intent from renting to selling. Since this is a holding period of waaay less than the normal one year minimum for an investment property, will it be treated as short term capital gain as my CPA says?

I don’t mind being aggressive with my taxes. I just don’t want to be stupid. Thanks in advance..

Very nice, congratulations!

Mmmm, Spam.. Just in time for lunch..😀

I'm getting a HELOC here in Ohio on my SFR. I believe it's at about 5.4-5.75% depending how much I pull out right away. No costs at all except for a $60 yearly fee.

Finding a property in a good area that cash flows $500 a month for that price might be akin to finding the perfect soul mate..

What a relief, I thought I was the only one getting tired of this kind of stuff on here.

@Mario Mormile

No, I didn’t. I am planning to sell and take the hit because I need the cash right now worse than I need a new property. I’d like to utilize the 1031 once I am a little further along. Btw, where’s Burton located?

Hi all,

I’m currently looking for a real estate attorney in the following counties around Canton: Columbiana, Stark, or Mahoning. I need help drafting a rent to own lease in compliance with the Dodd-Frank act. Thank you in advance!

@Ashish Acharya

Thank you very much for that input!

@Ashish Acharya

Thanks for your answers!

I think I’m still kinda confused about this so you or somebody else might need to dumb it down for me.

Since I intended to rent the SFR for a year before selling it, does this qualify me for long term capital gains treatment? (Without self-employment tax?)

What if I shortened the sale to within less than a year after purchasing it? (Still renting it for five months or so.)

My intent was to make it a income producing property before selling it. The variable here is time.

Thanks to you and all who viewed this..