In the event that the activity is determined to be dealing inventory by the IRS, the total taxes on the profit are high...

There are a ton of builders right now in South Florida as that is where the profit is at.

Make sure to keep your business finances separate from personal ones, and use something like QuickBooks to keep everything organized.

You might find yourself getting an even higher premium by giving yourself more lead time and getting those super organized people that plan ahead.

Example:-------------------Tenant A - Grandma Millie's Sewing ShopBeen in business 1 year, decently profitable, signs 5 year lease.Rent = $60,000/yearTenant B - Eye Doctor office.Been in business 5 years, quite profitable, signs 5 year lease.Rent = $55,000/yearTenant C - Subway5 year leaseRent = $50,000/year-------------------If I assign the following Cap Rates, I get these building values:Tenant A / 10% cap rate60k/.1 = $600,000Tenant B / 8.5% cap rate55k/.085= $647,000Tenant C / 7% cap rate50k/.07 = $714,000(or even $45k at 6% cap rate = $750k)-------------------I just made up all of these numbers.  

I've been a RE developer for nearly 20 years and I guide ordinary people to redevelop communities in an impactful and profitable way.

In a year, assuming it all worked out and you liked it you can rpeat at same level or slightly higher priced home if you’re turning a profit.

This creates two loan payments ($100,000 of equity and $300,000 on the new mortgage).Key NumbersHome Equity Loan Interest Rate: 6%Mortgage Interest Rate: 7%Rental Income: $3,000 per monthExpenses (management, taxes, insurance, maintenance): $800 per monthIncome and ExpensesMonthly Rental Income: $3,000Monthly Expenses: $800Monthly Mortgage Payment: $2,000ExplanationThe investor earns $3,000 in rent each month.They pay $2,000 on the investment property mortgage and $800 on other expenses.This leaves $200 profit each month or $2,400 per year.However, you have to pay $6,000 interest on the equity borrowed.This leaves you with an annual loss of $3,600.This example shows that while the rental property generates positive monthly income, the interest cost of borrowing the initial $100,000 results in an overall annual loss.

The market conditions in Crocker, MO, combined with the property's solid structure, made it an ideal candidate for a quick, profitable renovation.

Once built and sold investor takes x% of seller profits and i take rest of profits. goal to maximize on profit as a town home brand new is worth a lot more than what currently is there (100 year home).