All Forum Posts by: Ted Lanzaro

No, you have to purchase a property of greater or equal value to the property you sold. A 45k purchase only satisfies 50% and would only eliminate 50% of your gain. That assumes the related party rules don't prohibit the transaction. Ask your intermediary about this. Have a good night! Ted

Consult an attorney. There are a ton of legal issues here. You need an attorney to draw up an operating agreement to address all possible partner considerations. Plus, you may need multiple entities to do what you want to do. Start by speaking to good real estate attorney.

One, there are related party rules on exchanges. Two, a 45k purchase does not satisfy the exchange purchase price criteria for a full exchange. You need to buy a 90k property. Three, your wife's house would also have to be income producing. It cannot be your personal residence. Plus, you would have had to set up the exchange when you sold the first property and the funds would currently be held by an intermediary. Hope that helps, Ted

Contact a local real estate attorney and pay for some advice. Each state has different rules. You don't want to do something that violates the tenant's rights and gets you sued. Good luck, Ted

Tax strategy and entity type decisions should be tailored to your specific situation. There is no easy black & white answer to this question. Factors to consider: Is the LLC just you or you and your wife? Are you both maxing out the social security limit? How much are you making flipping per year? Are you contributing to retirement plan at work? If so, are you maxing it out? Both maxing it out? The point is that Steven Hamilton II is correct. You need to speak to a real estate specific CPA and have them tailor a plan to your specifics. But, at a minimum, if you are making 75 to 100k extra flipping, the Medicare tax (no limit) is $2,500 to $3,000 more on an LLC than an S Corp. Plus, you might find other ways to reduce your tax bill. Good luck! Ted

Find your local real estate investors club - there is one in Broward and one in Dade. Network and meet people. Also, look at the local Bigger Pockets meetup's in your area. Talk to everyone at the meetings, figure out who the most successful investors are and then see if they need help with their business. Working for a successful investor is the best and least expensive education you can get. Good luck! Ted

My thought would be that you better know what you are going to do with the land when you get it. I am often faced with situations like this here in CT where building a "spec" house on the property is not a great investment because there are few buyers. If you pay 300k+ for each lot, it means you are probably either building three McMansions on them or perhaps have another plan for developing the land. My point is that the value of the land is worthless until you know if there is a market for what you want to do with it and you have the money to do what you want to do with it. Make sense? Ted

What do you plan on doing with it? Rental? Flip? Live there?

You can't force your spouse to be interested. Talking about investing with someone who is not entrepreneurial is a waste of time. The best thing to do is quietly put together a successful deal that makes you a nice piece of change. Once you do that, she may still not want to hear about it but she won't actively block you from doing it. Join a real estate club and talk about it with people who share your enthusiasm. Just be aware that you may be putting yourself on the road to divorce. Make sure your dream is worth that possibility. Good Luck!

Hi xx, I am interested in buying your property at 123 Main st. Thanks, Name & phone number Hand write in ink on yellow legal pad and mail with an interesting stamp and no return address. Simple and it works. I have used the simple yellow letter to buy several houses. Good luck! Ted