All Forum Posts by: Zack McMillan

So I am trying to figure out the best way to sell a property to an end buyer. 

I signed a contract to buy a single family home from my grandmother in March for an agreed upon price (120k). I have a closing date on that contract listed for December of this year, 2019. Which, to the best of my knowledge gives me the right to sell or list the property  

Since signing the agreement, I have spent my own money to renovate the property (16k). 

My question is about the taxes.

Ideally, I’d like to assign the contract to an end buyer without having to get a mortgage or fork up the $120k. 

My question is- if I only assign the contract and never take legal possession of the property, can I deduct my renovation cost from my profits for tax purposes? Or must I take possession of the property in order to deduct my renovation cost? 

Hope this makes sense and thank you for any help 

Thanks Jay. I believe this property will appraise at 125k. I mean it definitely needs work and is small for the street. I just can’t decide whether to spend money on an addition of a master suite then sell for 200k or just clean it up and keep it as a rental. 

So my wife and I are starting on the process of buying our first investment property here in Louisville. Over the last two years we have forced equity into our residence by doing a live-in flip. We don't want to cash out refinance because our interest rate is ideal so we are leaning toward a HELOC. we have found what seems to be a great deal from my grandmother. She wants to sell her current single family house rental property to us for 125k. It's in a desirable neighborhood and everything in the neighborhood is selling for 200k or more for the most part.

The house has drabby but practical vinyl siding so I’m thinking about putting 19k down, plus 5k to update the siding and bring it from an eye sore to a stand out. 

We can't decide whether to update a little more and be all in for 150k to sell at 200k, or if to just do the siding and try to cash out refinance to pay back the HELOC and keep 20-25% equity in a stable rental for the long haul.

In other words- do we take a 40-50k profit now, or wait fifteen years to sell with a stable rental property, principal pay down, and natural appreciation?