All Forum Posts by: Chris Calabrese

I work with one other guy and we just did a 1560 SF, 3br/2.5ba for about $22k. We did a new kitchen (granite, cabinets, appliances), all new bath fixtures and tile, solid hardwood floors, new carpet, new vinyl windows, brand new heat pump, water heater and 90% new plumbing, new lights, fans, and hardware, interior/exterior paint, built 12x12 deck, landscaping, repaired extensive wood rot and termite damage, termite treatment and bond, graded and seeded yard, reinsulated and lined crawl space. Basically a new house. We do about 50-75% of the work ourselves and have a great network of connections in almost every trade.

Yup, what Kenneth said. In general, lay the floor in the direction of the longest wall in the room (unless you're on a wood subfloor, and then lay across the joists). It will make the room look bigger and result in fewer cuts. Jon's advice about moldings and undercutting the jambs is spot on, and will make your job look professional. Whatever you do, take some time to get that first row straight and square, as it sets up the rest of the room.

BS in Chemical Engineering. Hasn't helped me directly in real estate, but my analytical nature in general definitely helps.

I'm glad I went to college, but in all honesty if I had known then that I wanted to pursue real estate, I may have skipped it altogether.

Thanks Bryan. Here's how I understand it after discussing with a CPA. If I'm taxed as an S-Corp and pay myself a salary, that income would still be considered self-employment income, as this will be my primary business and my only income. However, I could pay a portion of the income as a dividend, which would not be taxed as SE. So, total profit of $100k for the year, pay $50k salary and $50k dividend and save half of SE taxes. So my question was, why not pay $20k salary and $80k dividend, but apparently the IRS makes sure that the salary is "reasonable" and will back tax you if you if it's not. So his point was that the S-corp won't save me anything until I make enough money to exceed a reasonable salary. I guess my situation is different from most because this will be my only business. Any other comments are appreciated.

Mitch, my accountant recommended the LLC based on our business model, with the option of converting to an S-corp down the road based on how things go.

After a couple of succesful flips in my own name, my business partner and I are starting an LLC and making a go full-time. We're looking for some company name suggestions. We're based out of the Charleston area, but I feel like all the "Palmetto This" and "Lowcountry That" names are overused. Any brilliant and creative ideas?

-Chris

Personally, I would buy anything if I thought I could make a profit. I mean, if I could flip a $3 cardboard box to a homeless guy for a bottle of whiskey, that's like a 500% return! I guess realistically, I'd like to stay away from 'war zone' properties unless I don't have to spend a lot of time there.

You don't necessarily have to completely replace the ceiling, but you can't exactly leave it alone either. First, get up in that attic and make sure it's not leaking any more - if it is, it obviously needs to be taken care of. I'd also check the insulation above that area, as it's probably moldy and needs to be replaced as well. With some good Kilz primer, you can sometimes paint over water stains, but that one looks pretty significant. You could always scrape the popcorn in that room and spray on a knockdown texture.

I'm trying to get a REO under contract, cash purchase. I have a good contractor that will do all the rehab, and in return I will split the profit with him (not sure on the % yet). What's the best way to set this up from a legal/tax perspective? I just want to make sure that I don't end up with the entire tax burden. Could we hold joint title? I'll obviously consult a lawyer, but I figured I'd check the wealth of info here first.

Thanks,

Chris

I always thought that you should be able to pay a bigger percentage over a certain price (i.e. 3% up to 100,000 and 10% of anything over that), but apparently this is not legal in most states. I don't understand why not, as most salespeople get paid more after they hit a "quota".

I think J Scott's reasons are all good for a normal homeowner selling their primary residence, as they have jobs, kids, etc. and don't have time to learn or do all this stuff. This site is for investors, and any investor with some financial saavy can learn to do comps and negotiations. And you can get a flat fee MLS listing for about $500.

-Chris