First Flip in St. Louis – Looking for Advice & Local Connections

[Igor Bakovic]

I'm looking to do my first flip in the St. Louis area. We currently own several long-term rental properties, and our primary goal is to continue growing our buy-and-hold portfolio. We completed our first BRRRR project a few months ago and are currently working on our second.

I’d love to connect with investors who have experience flipping houses in the St. Louis area and would be willing to share their insights, lessons learned, and any guidance for someone preparing to take on their first flip.

Our plan is to complete one or two flips each year and reinvest the profits into acquiring additional long-term rental properties. I’d appreciate any advice or connections from those who have experience in the local market.

Thanks,

Igor

[Ashish Acharya]

@Igor Bakovic, 

Congrats on completing your first BRRRR and preparing for your first flip. Since the long-term plan is to use the flip profits to acquire more rentals, one thing I would establish before closing is a clear separation between the flipping activity and the buy-and-hold portfolio.

A property purchased primarily to renovate and resell can be treated as business inventory rather than an investment property, which means the profit may be taxed as ordinary business income. Simply reinvesting those proceeds into a rental does not automatically defer the tax, and properties held primarily for resale generally do not qualify for a 1031 exchange.

That said, cost segregation on the rental side of your portfolio can actually work in your favor here. If you're materially participating or otherwise able to use those losses actively, accelerated depreciation from a cost seg study on your BRRRR or other rentals can help offset the ordinary income coming from the flip, so the two activities being taxed differently isn't purely a downside, it can be a planning opportunity if it's coordinated correctly.

Track the purchase, rehab, financing, carrying, and selling costs separately for every property from day one. It is also worth estimating the expected annual profit before deciding whether a separate LLC or an S corporation election makes sense. With one or two flips per year, the right structure should be based on the actual numbers, ownership, and risk rather than forming an entity simply because you are starting to flip.

Happy to connect!