All Forum Posts by: Andrew Yu

I sold a property a few months ago via seller finance. The buyer is backing out due to family emergency. How should I do the bookkeeping on it? My contract says in case of default, all the moneys paid will be treated as rent. Here is the journal entry on the original seller finance

Specifically what to do with Down Payment to Receive, Loan Receivable account, and Property Sale Profit account?

Ok... As far as Cap Gain Tax goes, here is how to calculate on a yearly basis:

1. Calculate Gross Profit Percentage (GPP)

    GPP = Total Profit / Sale Price

2. GPP multiplies Total Principal Received for the year

I'm wholesaling a subject-to property. The Buyer will needs 10K to close, wanting me to lend him the money thru my IRA. Can I do this? Is this gonna be prohibited transaction?

I'm currently selling a property FSBO. After inspection, I got a list of things needing repair. Buyer's agent without asking me whether I wanted to do repairs myself or do price reduction. She just sent me a repair addendum with this exact wording, "Buyers requests that Seller to escrow $5000 at closing for all repairs listed in attached Exhibit A to be held at Pulaski County Title".

This really confuses me. I have never heard of such way to handle repairs before. My plan is to just hire a contractor to do all the repairs in Exhibit A. I saw the list. There's no way it would cost anywhere near $5000. My question is why would Buyer do this? What's his incentive? Can he even use that $5000 in escrow for repairs?

I sold a house with 10 acres of land in Feb this year, and made some profit. 

Right now I'm selling duplex of mine, expecting to close within 1 month, should make a profit as well. 

I just acquired a SFH and plan to start remodel it within a week.

My question is can I use the 2 profits I made and use 1031 Exchange for this new SFH's purchase & improvement?

I have questions on whether I should expensing or capitalizing my costs on remodeling a property. I feel expensing is always a better option, since it deducts the overall taxable income to the most amount immediately. Capitalizing is using depreciation over time, when you sell the property, you have to recapture the accumulated depreciation. I feel capitalizing is a zero-sum game, basically you don't deduction overall if you sell. 

Correct me if I'm wrong. Sometimes I fix & flip immediately, sometimes I fix & keep as rental for a couple years then sell. What should I do here on my cost?

@Alan Johnson That's what I feel about Option also

I'm trying to be safe when I wholesale property. Right now when I market my lead, I always say "contract for sale", not "property for sale". I assign the contract when the buyer wants to move forward, generally within 30 or 45 days time window. 

But I also heard some people do Option to buy, then assign the option. Is that a safer way to wholesale? I guess it comes down to the Equitable Interest on the property. 

How about assigning Lease Option? Is that even safer way to wholesale? I know that's fundamentally different from just assigning the right to purchase a property...

@Mark Rogers In your opinion, what are the cons for getting a realtor license as an investor?

@Mark Rogers Love the recap you provided. I'm seriously considering to become a realtor just for a sake of being safe