All Forum Posts by: Charles Hinson

Welcome to BP Benito.  I'm relatively new to BP and to NM myself - BP is a great resource.  Sounds like you've already gotten started as an investor with 2 rentals so I'm sure you'll have success in HI as well.

Best of luck!

Charles

So exciting to see these pics - amazing job!

Hi David,

Welcome. I'm still somewhat new to REI too and still learning/figuring out my specific path. What struck me about your post is that you're giving your "Why" a lot of thought in addition to your "How" - that's great.  As you've seen in many of the "getting started" guides on BP, the why is the very important motivator for your how.  Keep exploring; keep making connections; keep asking questions...

Best of luck to you and feel free to reach out if I can ever offer any assistance/support...

Charles

Greetings and welcome.  I'm pretty new to this myself but welcome the opportunity to connect...

Best of luck!

Welcome Nathaniel!  

Bigger Pockets is indeed a great resource for you as you get started.  Also, the local NMREIA Chapter is a great place to network with like-minded folks - this is, after all, a relationship business.  PM me if interested in more information on that...

Good Luck!

Charles

Hi folks,

I'm working on a Flip (my 1st property) with a JV Partner in Albuquerque, NM. I'm having a discussion with my accountant at the moment about sales tax. He's my personal accountant who I'm trying to convert to my business accountant. He feels I need a CRS# and that I owe sales tax on the proceeds of the property sale. He checked with a Special Auditor from NM State who says, "...even though you don't have a contractor's license you are 'engaged in the construction business' so you are required to follow the same statute."  The statue she's referring to is...

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3.2.211.10 REMODELING OR OTHER IMPROVEMENTS:

A. A person possessing a valid contractor's license who purchases and improves real property by either remodeling or constructing additional improvements on the property and who subsequently sells the real property with the improvements is considered to be regularly engaged in the construction business. The receipts attributable to the remodeling or other improvements constructed on the real property are subject to the gross receipts tax. The receipts subject to tax are the sales price less the value of the real property purchased. The value of real property (VRP) purchased is computed through the use of a formula. The formula is the ratio of the cost of the real property (CRP) purchased divided by the cost of the real property (CRP) plus the cost of the remodeling or other improvements (CRI) times the sales price (SP), or:

VRP = ( CRP ) x SP

(CRP + CRI )

B. The value of real property (VRP) is then subtracted from the sales price (SP) and the difference is the amount attributable to the value of remodeling or other improvements (VRI), which amount is subject to the gross receipts tax, or:

SP - VRP = VRI (Taxable receipts)

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I disagree with this position since I'm not a contractor and don't have a contractor's license - the statute clearly says that condition one is "A person possessing a valid contractor's license...".  I don't meet that condition and therefore the statute is not applicable to me.  However, my accountant says, "It’s up to you on how you’d like to handle this, but I know for a fact that the state is auditing people for gross receipts taxes like crazy right now and the statute of limitations on them is 10 years."  

My understanding is that if the statute is vague, the law is interpreted in favor of the plaintiff.  So, while I don't shy away from a good argument, I'm also not sure I want to be a test case for tax statute in NM either.

What is the experience of other investors - in NM and elsewhere - on sales tax?

Thanks!

Charles

@Katharine Chartrand I should've been clearer. What I meant was that with REO's (which I'm mainly looking at) obviously owner financing isn't an option. And, based on my experience/comfort level, subject-to options feel a little too much for me to navigate at the moment. I'm looking for something a little more straight-forward (to me at least) until I'm more comfortable with "creative financing" options.

Thanks!

Hi Gary & Susan,

Welcome to BP. As you noted, there's a ton of great information on here. I'm relatively new to NM and just getting started in REI as well.

I wish you all the best and let me know if I can do anything to help (with my limited newbie knowledge).  :-)

Charles

Scot,

Thanks for your response.  I feel like the financing/deal question is like the chicken/egg question sometimes - which came first?!?  :-)

I hear what you say about $ coming if the deal is good enough - guess I'm just looking to be prepared to move f-a-s-t when I do find that great deal and not lose it while I'm looking for a way(s) to finance it.

Thanks!

Charles

Hi all,

I'm a new REI just getting started in the Albuquerque, NM market. I'm not currently working and using this "down time" to get my REI business going. I'm trying to arrange financing at the moment. I have enough cash to cover up to 30% down payment + rehab costs on two concurrent properties in my price-range. I need financing to cover the balance and am finding that conventional & portfolio loans are pretty much closed to me due to having no current verifiable income. I've found a couple of these options that could work without verified income but the terms reflect the additional risk the lender assumes they're taking in this scenario.

I'm likely too inexperienced to attract Private Money at this point and am currently renting so a HELOC is out. Perhaps a LOC or a Partnership? I'm not ready to convert my IRA to a SDIRA yet but realize that's another possible financing source. I'm looking at distressed properties so Owner Financing likely isn't an option.

Having said all that, I'm wondering if any of you have suggestions?

Thanks for any ideas...

Charles