All Forum Posts by: Scott Hawley

@Bob B. - I actually talked to my CPA about it. If I end up filing an amended return for some other reasons, I'll also pay her $500.

@Account Closed - they didn't, but hopefully they know about the tabs that Bob and Doug mentioned. :)

I wanted to share a funny story with you about a recent flip we did. This is a quick local condo flip where you are putting in about 20-25k which included an all new kitchen, floors, paint, bathroom, etc.

Everything went smoothly in this flip except it took 1-2 weeks longer than normal. Otherwise, right on budget. We list and it sells the first weekend for full price.

The surprise came 3 weeks later on the evening before it was going to record. The buyer's agent called and said that this deal was going to fall apart and not record unless 3 things happened:

1. The contractors left the old toilet in the storage room off the deck. Haul it away. [ok, no problem]

2. The smoke detectors needed to be installed. [they were in a box on the washer, but sure, no problem]

3. Plug in the fridge [this seemed a little petty, but our agent already axed many of the petty requests off the list, so sure, no problem]

Well, after completing #1 and #2, we learned why #3 was such a big deal. In the middle of the project, when ordering the cabinets, the GC made a decision to adjust the location of the fridge and the cabinet space. I'm a little embarrassed that I didn't catch this, but he didn't consult us but it looked fine. The problem is, that the outlet was not moved. So the power cord is just dangling behind the cabinets, which I can barely see through a drawer which does not come out easily at all and would need to be disassembled in order to pull it out, grab the cord and stretch it to the far side of the drawer and plug it in.

After trying to reach this any way possible, my agent and I were kind of scratching our heads and wondering what we would buy at Home Depot to plug this in and avoid taking apart the drawer/cabinet.

I called out to my awesome 5 year old, Kahlan, who wanted to come with Daddy to the house and asked if she thought she could fit in this drawer and if she wanted to be a hero. She was super happy to help!

She hopped in the drawer, then we had to close the drawer all but an inch so that just our flashlight app on our cell phones fit in the drawer, and then Kahlan was able to reach the cord, spin around, and plug it in.

She was a hero and we recorded the next day!

I bet you could drop off a shipping container. :)

Welcome to Bigger Pockets @Katie Golbienko. I'm not nearly as experienced as many on here, but I'm on my 6th and 7th flip right now. I'm happy to answer any questions I can.

I'm interested in learning more about the Tacoma and Olympia areas.

@Kevin Carbon is the Lakewood meetup a REI group with speakers or more of an informal meeting of like minded investors?

@Jameson Sullivan I would enjoy hearing about your first rehab in Tacoma.

Thanks,

-Scott

Sorry to hear that Matt. It sounds like a mess and is beyond my ability to provide advise other than 'lawyer up'.

Congrats! How did you buy that first building with no money or credit? How did you turn that into 90 units? Scott

People mitigate the risk by knowing their market, rental rates and vacancy rates. In addition, you should have some cash reserves to handle emergencies or surprises. When I put most of my money into a flip, I still had Two line of credits to mitigate the risk. That was even too stressful for me. I keep more back for reserves now. Scott

In my legal entities with partners, it defines how dissolution happens and how to resolve the assets. What does your operating agreement say? Also, on your taxes, how was the purchase of the rubber flooring defined? That might help, or hurt, your case. I'm not sure how much was spent on it, but if you disagree I would try to come up with a reasonable credit and meet in the middle. Scott

Hey @Greg Routen, it sounds like you and your Dad are going on trust and not concerned about having an official note and deed in trust. Here is my friendly advice (not legal or tax advice).

You can gift up to $14k to someone with no tax. Your Mom and Dad could each give you $14k which totals $28k. If you are married, they could also give your wife the same. If that is the case, then you have the $35k and are all set. If you are not married, write a note for $7k at 6% interest only with all payments and interest due in a year. Then your Dad/Mom can forgive the note in 2018 which would count as a ~$7k gift in 2018 and still have no taxes.

Then you can gift them back later as you can based on the understanding that you and your parents have.

I would also make sure that your parents understand that without a note and deed in trust to secure their interest, it could be lost if you were to have some devastating event like being sued (and losing), divorce, bankruptcy, death, etc.

I googled for my promissory note paperwork for my state. I suspect your real estate agent in your state could give you one.

Scott