Purchase price: $65,000, $6,000 down Cash invested: $8,500 Sale price for 50% equity: $10,000Profit: $1,500Partner paid mortgage.Total investment in the property: 6,000 down payment; 500 in lawyers fees to draw up documents for an eviction/offer of equity to tenants, and for the sale of my equity to my investment partner; 2,000 in my time and materials cleaning up the property and doing research and footwork to sell my equity.What made you interested in investing in this type of deal?

I would like to be able to draw on the line of credit as I am issuing the loans and quickly repay my lender when the hard money is paid back.

Then use the rest to go after the niche in real estate that draws your interest.

Remember to add in the cost for arch drawings, building permits, school fees in CA, as well as water, sewer (or septic system), electrical hook ups and gas if you want it. 

If you need me to do a drawing to show why this is a bad idea, I can. 

But a licensed person would have gotten the necessary drawings and permits.

Gary Sowell:whenever you deposit money into your business account out of your own pocket, it is called an Investment and Draw Equity Account, in your Chart of Accounts. 

This way is a quicker fix but comes with its draw backs also.  

A price reduction can draw some buyers in, but it may also dissuade others.

However, my big question is...Can the profits from my first flip still get taxed as S Corp (only on the partial portion of profits I draw as my salary not the distribution I take) even if the project actually started before I elect my LLC as a S Corp but do the closing , say on Jan 2, 2019, which is after the date of my election to tax my LLC as a S Corp?