All Forum Posts by: Nikita Khambe

Client wants to build a small sub-division of 50 homes in Texas with little hobby farms (veggies and cattle) in the community. What zoning category the land has to be? Commercial, Residential, or can we use Agricultural? Any help will be appreciated. Thank you.

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Nope. The investor found another lot.

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Hello everyone,
I have seen an unrestricted land at a great price; unfortunately it is in a floodway. I am wondering if any residential can be built with special permits. How else can the lot be used? The property is located in Houston TX. Thank you for your answers.

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Listing a property with 2 units in each building. Realist calls it Duplex, I also read that it can be called a small multi unit property and according to TAR it is 1-4 SF. I just want to make sure that I send correct contracts to the client. Any addendums to the Resd Listing - Excl Right to Sell?

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Originally posted by @Kenneth Garrett:

Here are a couple of scenarios. He is not funding the entire project so I probably would offer 25- 30%. His name is not part of the contract anyway. Its your contract. The investment from him is his IRA not him individually anyway. Not sure what you mean by his name on the contract. I would put offer in company name not your personal name. I have done flips where it is a 50% share in profits. There money (passive investor) and I handle the rest.

He won't be signing any purchase contracts. My LLC will buy, flip and sell the property. My concern is that the client wants more than 50% of the profits.

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Thank you everyone for your valuable comments.

Adding one fact here: The client doesn't want his name on any of the purchasing contracts.

Any idea on what share should I be taking of the profits other than my regular commission as a Realtor?

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Originally posted by @Kenneth Garrett:

@Nikita Khambe

I use IRA money on most of my projects. Is your investor a debt investor or equity. Straight percentage back on there money or part of the profits when the property is sold. Yes you need an agreement i.e., JV, partnership etc. Debt investors in my area 12% annually.

Fix and flips should be done in an S-Corp to save on taxes. The LLC profits will go against your personal taxes. You can have a separate LLC for the investors but it is not required.

Hire an attorney to go over the legal structure for both parties. Consult with a CPA on the tax concerns.

See Mark Kohler on YouTube for free info. He is an attorney and CPA from California. He works all over the country, a great resource. Has a podcast as well every week, mostly deals with real estate investors (legal and taxes).

Good Luck.

Thank you Kenneth. The client wants his invested money to be repaid plus profits, doesn't wish to earn any interest on his invested money but he also doesn't want his name on the contract.

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Originally posted by @Kris Haskins:

Ok, great idea. Will you be the borrower and his IRA lending you the DP? Or is his IRA an owner and hiring you to do the work. This deal sounds like it could get really tricky, OR kept simple if you're just the borrower on all the debt!?!

I will be the borrower and he will use his IRA money to make down payment.

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I am a Realtor in Texas and I have a client who is interested in flipping properties but wants me to buy, flip and sell properties and give him a return. The client has agreed to make down payments on all the projects with his IRA money and the balance will be leveraged using a mortgage that I will be borrowing as an LLC. Few questions I have are:

1. Do I need a side contract with the client? Terms?

2. What share of profits should I keep so that I can pay taxes on the income made?

3. Do I need a separate LLC to invest/work with IRA investors?

Am I missing anything important?

Thank you all for your answers and time.

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All Forum Posts by: Nikita Khambe

Nikita Khambe has started 4 posts and replied 9 times.

Post: Commercial/Residential Land for 50 homes with hobby farms?

Post: Uses of floodway properties?

Post: Uses of floodway properties?

Post: Duplex Vs Multi Unit vs 1-4???

Post: Investing with someone else's IRA money.

Post: Investing with someone else's IRA money.

Post: Investing with someone else's IRA money.

Post: Investing with someone else's IRA money.

Post: Investing with someone else's IRA money.