Philadelphia, PA · Member since 2009 · 97 posts · 31 votes
I started researching wholesaling in December, about the same time I joined BP. I have wanted to get into REI since I was 18 (im 26). I got laid off and felt it would be the opportune time to get into REI. I started marketing at the end of July/late February. I will be getting my 1st check this friday. I got a property under contract for $15k and I am assigning the property for $20500. I will gross $5500. I just want those out there who are thinking about getting into REI to know that if you put in the time and effort in this business, it will pay off. It wont happen overnight but with patience and persistence it will happen!!!! Thanks BP for all the information and motivation!!!
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Frank,
I see you are assigning the contract. Did you account for the Real Estate
Transfer Tax that will have to be paid on the assignment, per PA Dept of Revenue rules? Anywhere from 2% to 4% RTT might be due, depending on location.
Philadelphia, PA · Member since 2009 · 97 posts · 31 votes
16y
Thanks everyone.
@steve-i am using the end investors title co and I didnt factor in the transfer tax but i will look into it further and factor that in next time.Thanks.
On another note, should be closing deal 2 next week for $2k. Will keep everyone posted
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Originally posted by Frank McGovern:
...
On another note, should be closing deal 2 next week for $2k. Will keep everyone posted
Depending on where that property is in PA, a $2K assignment could be consumed completely by the RTT, netting you nothing; see how it works on your first closing to understand. I doubt that this type of "double taxation", with respect to the RTT, happens in any other state but PA.
Flipper/Rehabber · Mobile, AL · Member since 2010 · 138 posts · 55 votes
16y
Frank, good stuff!
My question. Did the buyer care that you were making money on the deal?
Sometimes for new guys, that becomes an issue and how to handle, etc.
Again, Congrats!
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Frank,
How did that second one go, the one for $2K assignment? What did you net?
Looks like with the first one, they only charged you for transfer taxes on your assignment fee - that's as good as you can expect things to go. There are some closing companies who are more strictly following the rule, and they hit the middlemen for the transfer tax on the full sales amount too (not just the assignment fee) when doing so.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Originally posted by Frank McGovern:
Thanks everyone.
@steve-is there a different contract I can use to avoid the tax?
If you encounter a situation where you have a need, there is an attorney in the Pittsburgh area that has a strategy and some paperwork that is available for purchase (and it's not too expensive). I posted the basic idea elsewhere on the forums.
Philadelphia, PA · Member since 2009 · 97 posts · 31 votes
16y
I didnt close on that deal yet. There were some issues with the title due to the owner having inherited the property but i am still working on it. Have some other deals I have been working on that look very promising. I will definitely contact you if I have any issues so you can put me in contact with that attorney. Thanks Steve!!
Philadelphia, PA · Member since 2009 · 97 posts · 31 votes
16y
I closed on deal #2 yesterday. Walked away with $5750. So to all the newbies out there that are still wondering if they can do it, I am proof. Dont wait for the perfect deal, just get that 1st deal done. Seems like the 1st deal is definitely the hardest. Thanks for everything BP!!!
Investor · Westminster, CO · Member since 2009 · 1k+ posts · 1k+ votes
16y
Congratulations Frank. You have shown that it can work. It doesn't happen overnight, it takes a a little time and a lot of work. Also proud of you for not trying to make a 'killing' on one deal. Just keep those $5K and $10K checks rolling in, nothing like it in the world.