All Forum Posts by: Brandon G.

If I purchase a flip property at the end of this year and then sell it at the beginning of next year, how is that taxed? For example, are the expenses reported as a loss this year and the entire sales price shown as a profit next year?

@Nick B. & @Hattie Dizmond 

Thanks for the replies. Can you tell me what is a reasonable expectation for insurance for a rent house?

I'm playing around with J Scott's rental analysis spreadsheet. I've read that $100 a door is considered a good deal but not sure what all needs to be included in the equation. 

As a case study, I'm using a house in Rockwall, TX whose ARV is $150,000 and rents for $1395 per month. At 70% ARV, that's a $105,000 investment. Some other variables I"m using are $3290 for property taxes, $660 insurance (total guess), $1,674 for maintenance and capex, 12% PM etc. After all this I only come to $403 annual cash flow.

So my question I guess is what's wrong with this deal? Are rents too low in this area? That seems to be the going rate for houses in the price range. Please advise. 

My wife and I have decided we need to make our first deal our own house. The problem is we don't want to tie up our cash so was considering using a mortgage. We both have 0 credit history so was considering an FHA loan.

My main concern is since it's so difficult to find deals right now in Dallas, won't having to use a loan to do the deal make it even more difficult since motivated sellers want cash buyers? If I were to buy with cash and then refinance out with an FHA loan, would that be a good idea? If so, how long would this tie our cash up? Anyone have any advice?

 Hi, I know this thread is old, but can you elaborate a bit on the above quoted statement? I'm new so I don't know what the rule was before nor do I know what it is now. Your input is appreciated.

@Dinesh Babu PM sent.

In my last post, I meant custom* house not customer house.

@Hattie Dizmond Thanks again for your the great info! How about lot size? A spreadsheet I downloaded asked to assign my guess for the price of an acre and it adjusts lot sizes based on that. Do you adjust for lot size and if so how do you calculate it? Also, what about things like a pool? 

@Robert Leonard Thanks for the additional info. The point about a dividing line makes a lot of sense. I realized this when I was playing around with comps in my neighborhood. We live in a customer house but just a few streets over are some Fox and Jacobs track homes. There is no clearly defined dividing line such a main road or RR track, but the cost difference between the homes is probably about $20,000, which would really make a difference. So knowing the neighborhood is important for sure. 

I joined a service that will give me MLS data and so now I have access to this info. But how do I start learning the details? I understand that I have to make adjustments to comparable houses for an extra bedroom or bathroom for example and I understand the math, but how do I determine what a bedroom, bathroom or extra square footage is worth? Are there some general guidelines I can use to start my studies? Maybe a bathroom is worth some percentage of the ARV? I'm looking at homes in Richardson, Plano, Garland areas for now. Can someone with experience in those areas give me some pointers?

@Brandon M. Thanks for your very helpful explanation!