The IRS views it as taxable income because it’s not being used for the purpose of deferring taxes under the 1031 rules.For example, if you sell a property and only use part of the proceeds for the next investment, the leftover amount (after paying transaction costs, etc.) is taxed.

I live in Detroit but envision running the investment as a business, not a third job: Pay top dollar for the best PMC.

Hey everyone,I’m diving into multi-family real estate in Los Angeles and California and looking to connect with like-minded people as I build my portfolio.

With that in mind, I’ve decided to focus first on finding a distressed SFH that I can add value to, live in for a few years, and keep as part of my long-term portfolio.I like your suggestion about building the “core 4” team—agent, lender, contractor, and property manager—and will definitely prioritize that as I move forward.

It may even take a 3-5 years to get cash flow positive but if during that time it is cheaper to own monthly, than pay rent, you are way ahead.  

You can also request a security deposit for extra peace of mind. 

Sellers rarely mind the low deposit and extended closing period due to the nature of the property, or at least they can be made aware of the fact that their lot has issues that will take MY time and MY money to solve and then they come around.My terms on the flip are: Minimum 10K spread between purchase and flip value.  1-2K deposit upfront to hold the property for 7 days then the deposit becomes non-refundable after the 7th day and the buyer has the same amount of time that I originally negotiated with seller typically 8-12 months(its a purchase contract but because of contingencies its essentially an option).  

If you have 30 years uninterrupted with no complaints or major complaints I have never had a complaint and have been licensed 50 years once you hit 70 no longer need to do CE just pay the fee every 4 years :) 

Hi Devin, Have you ever considered that instead of America needing smaller homes that are more affordable, that America needs more higher paying jobs so that people can live the actual American dream versus having to settle for less and less and less (Has George Carlin pointed out in his classic speech about this). 

This capital call only makes sense if asset value appreciates in 1 year and after paying down debt, there is enough cash to pay investors.