New Investor in Santee Looking to Learn Land Flipping

[Lena Dubrovsky-Fishman]

Hello BiggerPockets!

My name is Lena, and I’m based in Santee, California (San Diego County). I’ve been learning/reading about different types of real estate investing, and land flipping is the one that’s really, well currently, caught my interest.

I’m just getting started and would love to connect with a few local investors in San Diego County who wouldn’t mind sharing some insights or letting me pick their brain about the process.

Excited to learn, grow, and start checking off some big goals!

Looking forward to connecting!
– Lena

[E.J. McCaffrey]

Welcome to the group! 

Real Estate Flipping can be a highly lucrative investment strategy, but it’s important to approach it with the right structure to avoid being classified as a “real estate dealer” by the IRS. When the IRS considers you a dealer, your flipped properties are treated as business inventory rather than investment assets. This classification can have serious tax implications. It disqualifies you from several key benefits typically available to real estate investors, such as 1031 exchanges (which allow you to defer capital gains taxes), installment sales (which spread out tax liability over time), favorable long-term capital gains tax rates, and depreciation deductions. On top of that, income generated in this context may also be subject to self-employment tax at a rate of 15.3%, including certain types of rental income. For anyone considering flipping as a business model, it's crucial to plan ahead and structure your investments in a way that supports your long-term financial goals and minimizes tax exposure.

Best of luck!

Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.