All Forum Posts by: Rick J.

Hello - As you can see I am new to this site but have been following BP podcasts for a long time. Have a few investment properties that I have acquired through mortgage and now have an opportunity to buy in cash. I have come in to some funds which I would like to invest wisely and I would appreciate your advise.

• There is so much info in BP that sometimes it's information overload. Do you know of a step-by-step guide within BP?
• Is BP Pro upgrade worth purchasing in the beginning or later down the road?

Thanks in advance. 

I hire many w2 contractors, employees and 1099/C2C consultants in my IT business. The industry is different but the underlying tenet of employment should largely be the same.

Big part of your answer depends on what is going to be your 1099 hourly rate vs what will be your w2 hourly cost/salary range?

For example - let's saying your company is paying you $100,000/year in salary, they may offer you $50/hr saying it comes to $100k (50 weeks x 40 hours) but as you can see that's a raw deal because your loaded cost of health, vision, dental benefits are not baked in, neither is your 401k. So typically we take 20% higher on a w2 vs a 1099 ie, if the company pays you $100k salary, you should at minimum ask for $60/hr 1099 or higher.

Next is the liability. On a 1099, a company can refuse to pay you for a job poorly done based on the contract you sign. On a w2, you can do a terrible job and get fired, but you will still get paid for every hour worked because if not that will be a DOL violation.

Lastly the unemployment benefits. Though small, God forbid we face a major recession again your unemp benefits will kick in based on your accrued hours.

Personally I like to be a w2 employee and have my side hustle on a 1099 for my tax write-offs.

Chris - Thank you so much for the insightful comments.

I am based out of Atlanta and the 'warzones' are changing because of the Belt-line being built 4 miles away, but it's still very rough.

My intent is to rehab and rent and possibly flip.

Your 1031 comment makes total sense.

Thanks again!

I am very new to real estate investing. Apart from owing my own home, I decided to buy a home in a  "war zone" sight unseen for $54k cash. After 3 months of waiting on a lengthy eviction, the home is finally empty but it's in terrible shape. They basically lived in squalor and I would have to demolish at least 60-70% of the house and rebuild.

An investor called me today and said that he will buy it off my hands for $70k.

I am not a flipper. I was genuinely wanting to rehab my first home and rent it, but this may be too big a project.

My question is:

1. If I sell the home and make $16k in profit, would I owe uncle Sam 35-40% in taxes for a short-term flip based on my w2 bracket?

2. If yes, would it make sense to just board up the house, buy insurance on it, and sell after a year for a 1031 exchange?

3. Or if you were me, would you rather take the cash today? (Time value of $)

Thank you so much in advance.