All Forum Posts by: Terry Royce

So you cannot roll profits from a flip into a hold via 1031?

Im not an expert, but in a 1031, the profits must be transfered to another project of like kind within a 3 month period.

So you are not getting paid in a 1031.

Someone with more experience Ims sure while chime in.

I have a seller who is open to letting us take over the payments.

The way we were looking at structuring it was to have the seller put the property into an LLC, and have an operating agreement that lays out the structure/terms. This way the seller is still on title technically, but by way of the operating agreement we have the ability, to rent/rehab etc.

Any input would be appreciated!

@ Sanchez - If its a really nice retail area, you can push up to 70%.

If its in a crappy area/low income etc, you will want to be even less than 65%.

Look at what others that are buying in the area are buying at, that are then fixing and putting back on the market...this will give you a good "ballpark"

You need to analyze sales, listings, rents, demographics, trends etc.

The more you know, the quicker you can analyze a good deal or a bad deal, and make critical decisions, and take advantage of opportunities. Good luck!

@Mary B. - No worries, but you said those deals will NOT close.

"Those deals with the $15,000 to $25,000 to the wholesaler will NOT close as assignment deals best believe!"

I just didn't want anyone less experienced to think they COULD NOT assign a deal with a larger assignment fee. The most important part is controlling the transaction (prepping buyer / seller etc / doing a split closing) Whatever you think you need to do.

I've double closed on a $15k fee deal b/c I thought there was a chance the seller would flip, and I've assigned deals w/ a $29k spread b/c I was comfortable with everyone in the transaction.

Every scenario will differ.

I am trying to figure out the best strategy to sell this house.

We got the house under contract for $15k w/ $1k down with the balance financed @ 6% (P&I $155.43) Payments amortized over 10 years w/ a 5 year balloon.

I am thinking we can sell it for $28k w/ 2-4k down and create a second position note for $10k (either P&I or Int Only)

We could also assign outright and collect a $4-6k fee, but I think we could do the above options and profit more down the road.

I am also thinking we could do a lease option if we can find a buyer before our settlement date, we can collect $4-5k as a down payment. I've never done one before, but from what I understand seems like it could be a good strategy as well.

Cash sales are 20-26k in the neighborhood, so with the financing we can push that higher.

What are your thoughts?

Great basic points Ned.

Many were taking little, to no, and even negative cashflow betting appreciation.

@Mary-- that is not true. An assignment fee can be any amount. I have personally closed multiple assignments that were over those #'s. Many wholesalers prefer to double close on larger fees to not let either party immediately see what you making. I'm not sure where you got that information.

@Steven Hamilton II - How does that not fall under capital gains? I'm no tax pro, but it seems that you are, per your sig :). Thanks for the clarfiication