First time flipper...
My fiance and I have twin boys and two other kids. We have a wonderful house of our own and we both have great jobs. Dan is the owner of a successful construction company and I am in marketing.
We bought this small house in Northern Iowa where we live. The house was a foreclosure wanted $20k and we got it for $12k - we did an analysis and breakdown - we are going to spend $13k in fixing this property up (labor and material... thank goodness this is what Dan does for a living!).
Here's where it gets tricky... The house is under my name - Dan is not in the papers at all. For tax purposes do I "hire" Dan's company to do the work and pay him or do we just do it and not include the construction company. Some of his guys will be doing some stuff like the roof, etc... I just need to know what's the best way to do this and come ahead for both me and my taxes and his company. This is going to be an ongoing investment, of flipping and/or renting houses and this is our biggest battle so far. We have a CPA but he explains things in a crazy manor "if" and "if". We can easily sell the house for $40k and I want to take the profit and put it right back into another flip - so should I do a 1031 exchange?
Thanks everyone! :wink: