I have a question I'm trying to wrap my head around. I have a client that has a parent company that flips houses. An LLC collected private investments to invest in the parent to pay for the fix and flip in order to hope for a gain at time of sale.
My question is: if the LLC wants to send out investor statements during the time the house is still being rehabbed, I feel like I should record an unrealized gain on the investor side in the LLC because the value of their investment is going up while the parent is fixing up the property. Clients are on the accrual method and follow gaap.
Any advice would be awesome.
Thank you in advance! Roxie
Hey, its a good question but a lot of us do flipping only and don`t always have a good grasp on these issues, I suggest contacting a real estate attorney. Good Luck, hope this helps.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing