All Forum Posts by: Dell Schlabach

Congratulations on your first flip highly profitable flip!!

 60k+ on your first flip.

For that kind of money, l would learn from the critique, and ignore the others.

We were on the other side of one of these a couple weeks ago.

If you really want the deal and are confident that it will close. 

I would suggest taking Brian's advise. I asked our buyer for 2,500 non refundable if he doesn't close  in three weeks, he did that and we ammended the closing date.

If that doesn't work and you have a really sweet deal, you can also ask him how much extra he needs to stay in he deal. Maybe an extra 1,000 - 5,000 would keep him in he deal. You have to determine if it's worth that to you. 

You have options but threating to sure him is not a viable one. 

Good luck

We wholesale 40+ houses a year, most of them we double close on since they are bank owned and can't be assigned. 

Ohio, if your volume is over 1,000,000 in sales you pay CAT (commercial activity tax). 

You don't have to sell many houses to exceed the million dollar mark.

I am told I need to pay CAT tax on the sale price of them. 

Odd tax it seems like, nothing to do with profits, if I lose money on a house I still have to pay CAT taxes on the price of the sale. Had a friend sold a 750,000 house lost about 60k on the deal and has to pay CAT taxes, that's painful. 

We wholesale as a side business to our rehabs, to guys who buy from us consistently, and charge them 5,000. Not a lot of money but it's consistent business, that's easy and when you do volume it adds up.

So when I wholesales a house for 200,000. And make 5,000, I have to pay CAT tax on the 200,000. Just seems wrong, but I haven't found an accountant who has a legal way around it. 

Looking at financial statement here with 22,274 in CAT taxes I paid last year.

Any one know an accounting workaround that won't get me into hot water with the IRS. 

We rehab and flip/wholesale 50+ houses a year, spent 50k plus on gurus and seminars and fast tracks that didn't help much. If I had followed the advise in these books for 49.00 I would have shortened the learning curve massively. This is by far the best nuts and bolts how to manual with checksheet, scopes, work order ...easily worth 10k in my opinion.

Compared to some of the 10-30k stuff being sold, this would be worth 5-10 times the value of most of those programs in my opinion. 

They are the books I give to every new Affilliates that joins our group and buys properties from us to rehab.

And nobody pays me to reccomend them ..... 

This should be the course material to teach the fundamentals of rehabbing houses in my opinion. 

https://www.biggerpockets.com/store/e-book-flippin...

We buy quite a few with water in the basement. 8 inches of water does not typically cause foundation issues. 

We've bought plenty with 2-3 ft if water. Typically the power is off and the sump pump not working and or other drainage issues that can be fixed. 

If you know the source and have a solution to fix it  get some 24 inch waders and a powerful flashlight and walk through the basement see if there are any obvious foundation issues.

8 inches of water in basement will typically destroy your furnace and your hot water heater and most things sitting in the floor, but if you budget for those you should be good. 

If it's finished basement, you have trim and drywalling that needs removed and potentially some framing .....but at 8 inches your wiring and recepatcles should still be ok.

Budget for the repairs needed and offer accordingly. Other option have a waterproofing foundation contractor go inspect with you. 

Good luck

 If our area there are a lot of the 30,000 houses, most of the 20k-30k houses are bought by local landlords, or investors and as to the out of state guys for 40-60 and they try and manage them for a few years and then try and  sell them after they get fed up tryi ng to manage them from a distance, most management companies do not like to manage that price range of properties and the tenants they typically draw. 

When they out the properties in the market a few years later, unless they can sell them to another outbid state investor they are typically stuck with selling them to the local for 20-30k .  Not a lot of return realised in this scenario ,  I have seen this repeated over and over during the past 15+ years. 

Some people are making money in this game, mostly locals who know the neighborhoods and the schools districts well. Don't expect houses in most areas in this price range to appreciate in the next 10-20 years. More likely, if you are an out of state investor, your property will sell for less then you paid for it. The 200.00-400.00 a month cash flow quickly gets wiped out with repairs, vacancies maintainance management..or your trips back here trying to run them when things go wrong. 

I know a few people who do well in that market, but I know a LOT more who don't. 

 Your logic here again appears to be, because they are advertising property they don't own, it is illegal

Copied this from one of your responses...

 ....If you were putting properties under contract for the sole purpose of selling the properties you were brokering...

So this seems to be the clause that makes it illegeal if I am not licensed, doing mostly assignments as a business model?