Updated over 5 years ago on . Most recent reply
Using Flipping income to improve DTI
Hi all, just a question I have that I've been having trouble finding an answer to. I have flipped 8 houses typically going at a rate of 1 per year with a very good return since I do a lot of the work myself. I have enough cash on hand to start doing multiple and also starting to accumulate some rental properties. I am exploring ways that I can leave my full time job and be able to still finance some buy and holds. Here is my situation: I currently carry a mortgage on my primary of about $500k. It is solely in my name. My wife owns a business and carries a good income that can support what I am trying to do. Since I would show no income I would not be able to finance anything but my wife would be free and clear to start mortgaging these properties on her own. I do plan on supplementing income with 1-2 flip houses per year. A few questions I had.
1. Is there anyway to claim income from flips without having dealer status?
2. What makes the most sense to me is opening the LLC in my wifes name for our flips and running all the income and future financing through her, keeping our primary residence debt under me. Does this make sense? Back to the first question, would the LLC automatically have dealer status or could this be avoided?