From my experience a cap rate being used or not more comes down to the sophistication of the investor (seller and buyer).

In my area the margins on flips are shrinking but the volume of would be flippers is increasing, this is simply because the overly optimistic investor isn't requiring an appropriate risk premium, this drives out a lot of the "smart money" and pushes them into more sophisticated, complex, and less inundated areas of RE in which margins are still suitably fat.The last thing ill mention is that a lot of the high debt/leverage people are on this thread defending their positions.  

You will have payroll and tax filings.  

You will need to work with a tax professional to analyze your current tax situation (income, deductions, activities, etc.) as well as projected income from the fix and flip business.The benefits have to outweigh the costs (payroll costs, additional tax returns, more stringent reporting and compliance requirements, etc.).One important note - an S Corp is not an entity; it is a tax election.

I believe sharing insights on these topics can help us all grow more sophisticated in our approaches.

The easiest way is just do it all myself.The other option which might be cheaper in the long run is to hire one (only 1) employee to work on my own properties (am a 'builder-owner until CSLB license issued) and pay for WC insurance which I hear is what, $4 per $100 payroll issued?

Hi Kelly,I'm sorry I'm not as sophisticated as you when it comes to writing and all of the "factually incorrect" terminology.

You can find other more sophisticated calculators but the biggerpockets one has been more than sufficient for me.

@Thomas Talbert your CPA should be telling you that you need to make yourself a W-2 employee of the company and pay yourself a monthly paycheck.The payroll tax deductions will help avoid a huge end of the year tax bill.Also, too large of a tax bill will piss off the IRS and they may charge you penalties + interest for not making quarterly estimated tax payments.

So to make payroll they have to keep churning over deals OR they might be a good person but simply have limited knowledge.