How Do I find A Realtor In South Florida That Uses BP investing

Question

Hi BP friends, We are looking for a realtor in the Broward County area to help us with investing.   We are canadian and my husband is a building contractor.  While we are here for the 6 months, we would like to buy a small unit that needs fixing (floors, new kitchen, new bathroom, etc), so that we can flip it and then buy another one on a 1031 exchange.  We need a realtor that understands how to make profits as per the education on bigger pockets.  We are looking for something in a community such as century village.  We are looking to buy in the low time (December just before the holidays), fix it and flip it to snowbirds in Jan / Feb (peak time).  The price range we are looking to buy in is $25,000 - $30,000 and we are looking to make approx 15,000 profit.  We will be looking to continue this for some time. Can anyone help me to connect with an agent that can help in this area?

John Thedford · Answer

A friend of mine is an agent and they buy off the MLS regularly. It doesn't matter what the asking price is. It matters what the seller is willing to accept. Keep in mind all cash offers with quick closings and a short term inspection contingency will be looked at more favorably than someone wanting a big discount and financing contingencies as well.

Dave Foster · Answer

@Lisa Mauritis, I hate to be a wet blanket.  But @Wayne Brooks is right about the 1031.  If you buy a property with the intention of immediately reselling then you cannot do a 1031.

And more potential bad news on top of that.  Make sure that your $15K profit is net of all costs of selling including realtor commissions etc.  If you really want to get accurate with your return then take ordinary income tax from the $15K which including self employment tax will run you almost $7K so you'll end up with an $8K profit at best.

And  yet even more potential bad news - Depending on your immigration status you will be  subject to FIRPTA withholding of 15% of the sales price of the new property.  This is not a tax but to get it back you must file a tax return.  So if you don't do that already you've got to factor in that cost as well.

This seems like a lot of work for very little return.  However, if you could adjust your model so that you buy fix and rent for a while then your tax rate goes down, Appreciation goes up, Equity builds, a 1031 exchange is available to you, and FIRPTA can be waived in the 1031.

Brian Garrett · Answer

I agree with you. Deals are always out there we just have to find them. Like I always say if there's a will, there's a way!

John Thedford · Answer

They are in Tampa. I bet they are buying at least one every three or four months. Some for buy and hold and others for rehab and resale. My point is you CAN make deals happen by making offers.

Brian Garrett · Answer

Your friend is finding deals regularly off the MLS here in South Florida still now?  If so, do they work in my area?

Dave Foster · Answer

@John Thedford, And they've changed the test since you took it  in '69 :)

If the property is owned by a domestic tax paying entity (whether corporate structure of some kind, or resident US tax paying alien resident) then FIRPTA is not withheld.  But that of course adds another layer of cost to their model for the same modest gain.

John Thedford · Answer

@Dave Foster

I believe FIRPTA does not come into consideration if the property is owned in an LLC? Is this correct? One last note: OP needs to consider that a change in title holder name will NOT get around FIRPTA. Correct?I am going by memory..i forgot most of this stuff after the test:)

Lisa Mauritis · Answer

@Wayne Brooks thanks so much for you input.  We are not in a position where we can retire yet.  Since our funds are limited, we would like to put in the sweat equity into a low risk investment rather than cash.  What would you suggest?   I already found something on my own in that price range and according to my calculations, once we pay for materials, we could make the $15,000.

Brian Garrett · Answer

I'm looking for an agent in West Palm Beach that understands investing and knows how to evaluate and analyze deals. So far I haven't had any luck. I know a LOT of agents in Palm Beach County but they all deal with end consumers and people who are just looking to buy or rent a home at regular market prices. Finding someone who understands the 70% rule, the 1% rule, the BRRRR strategy, etc seems to be the challenging part at least for me so far. I'm just giving every realtor I talk to my criteria and telling them to send me what they find so I can analyze myself but it sure would be a lot more time efficient and more effective if I can find an agent who understands investing themselves.

How Do I find A Realtor In South Florida That Uses BP investing

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