All Forum Posts by: Chris Licavoli

I am happy to announce that I have just completed my first flip project using private money.  The project was successful and the investor received a check at closing for his principal plus interest.  He was extremely happy to say the least, but I believe I have created an obligation for myself to report his interest earned to the IRS.  I have no idea how to do that or if I do have to do that.  Are there any experienced PM users out there that can offer some advice.  Is this something my CPA will do for me or should I do it?  How do you do it? 

Thanks in advance!

Sam -

The reason "it doesn't work" in 2014 is because the market is recovering. In just the past year I have notice dramatically higher competition levels which translates to a smaller discount from list. Its just supply and demand and one must flex and find the discount that does work in your area. On the good side of the ledger, market prices are rising as well so its all relative. HUD wholesales are tough now, but HUD rehabs and HUD holds as rentals still work great in GA. The principals of systematic bidding and gorilla marketing are as relevant as ever in the HUD game.

Best to all!

The main reason I opened the SD IRA is because, as a flipper I am getting KILLED on taxes! But its hard to get enough funds into the account to handle a big flip so its either JV or put the funds to work doing other things until is grows large enough to fund flipping activity. That's my long term plan.

Totally agree with you Ned. I do own Liens but I find them very difficult to locate and purchase. In Georgia you have to physically go to the courthouse to bid and there are 130 counties in GA! The ones I purchased were after the fact, non-sold liens in Florida which mostly do on-line bidding but finding decent properties with liens that have not been bid down to 5% interest is difficult to put a lot of money into play. You can buy 16% interest liens on vacant land in FL all day long however!

Thank you so much for all the helpful advice. It makes sense that you have to get a commercial loan to do a deal like this in the IRA but I also heard that you can JV with yourself and your SD IRA. Don't know the details, just that it was possible.

Greetings BPers!

I would like to learn how to purchase a rental property through my self directed IRA. I have an account through Equity Trust. I have enough in my SD IRA to make the down payment of 25%, but how do you get a loan through the IRA? No bank would make a loan in the name of the IRA entity I would think. I can qualify personally, for the loan, but I am not sure if a bank would make a loan to me, on a property that is owned by my IRA? If anyone has any experience in this please reply here

Thanks!

Hello to all 1031 exchange experts! I am about to undertake my first exchange and am wondering what credentials I should look for in selecting a QI. Besides the obvious good referrals, do agents carry bonds or insurance or and other certifying credentials I should ask to see? I have heard of horror stories about peoples money getting stolen by shiester intermediaries who accept the funds but never pay out.

Hello Mark,

I personally spend zero time bidding. I outsource it to agents who are happy to do it because I give them repeat business.

Regards

Sure, and here is an update, I ended up buying 10 properties through this program in 2013. HUD provides an appraisal of as-is condition value. I had to bid on probably 100 properties, multiple times to get these 10. The average purchase price was 73% of as-is with a range of 50% to 91%. It took on average 73 days to sell 8 of the 10 properties. All but 2 were sold to owner occupants who got loans. The other 2 were sold to investors who paid cash. All properties required some level of renovation ranging from $2 psf to $10 psf depending upon condition of the property. The two I did not sell yet are much heavier renovations in the $20 to $30 psf range of renovation costs. The ARVs are typically well above the as-is appraisals. While I believe it is theoretically possible to buy and wholesale these "with no cash or credit", it would take a very large and responsive buyers list to pull off. Since I don't have that yet, I use my own funds and private lenders to fund the deals. Hope that helps. By the way, we offer our private lenders double digit rates of return or a piece of the profit, whichever is greater. If anyone out there has funds they want to put into play, just message me and I will slot you into one of our next deals.

Regards

Does any one know of a good ipad app to estimate renovation costs as you walk through a house? I checked the iTunes app store and didn't see anything. If it doesn't exist who wants to pitch in a develop one for the BP community?