All Forum Posts by: Dave Godfrey

I am looking to use my SDIRA funds for a wholesaling. Seeking a lawyer to review a specific idea/possible transaction.   Maybe set up an entity if needed.

Hi everyone!

On a seller finance deal, what does the seller report as income? Is it upon the sale of a property... or is it on a Cash basis, that is, only when cash is actually received?

For example:

Purchase Price: $100k (original transaction)

Purchase Date: 1999

Seller price: $300k but will finance $150k over 10 years. Thus, the Seller receives $150k down now... but then $15k per year for 10 years.

Does the Seller pay tax as they receive the cash? Or does he have to report a profit of $200k ($300-$100k) upon the today's sale?

Thanks,

Dave

@Nick Bogatin. @Alan Blitz

Welcome to BP... There are many local real estate groups, including DIG. That should keep you busy for a while... LMK if you would like to connect.

Happy Investing!

Dave

@Shaquille Thomas

Welcome to BP!

I live nearby. We could meet up sometime if you like.

Let me know if you have any questions.

Good luck on your journey!

I agree with @Theo Hicks. Cozy.co is a great service. If the tenants balk at a relatively small fee, then that tells you something about them. Good luck!

@Account Closed   Thanks for the reply.

That is interesting take.    One I took for granted but I could propose it and the worst is that they could say no.

I am thinking about offering a couple options to a seller on a specific property. (Cash offer and seller financing)

Property is priced quite high and it doesn't make sense currently. However, they are open to seller financing, which could make this doable and more interesting if the terms are good.

#1 If I do seller financing over 5 years... but what if I want to sell the property before then? Is there any reasonable way to continue the financing, independant if I sold the property, before the term is up?

As an alternative...

would a rent-to-own to an end buyer be the 2nd best exit strategy?

Thoughts?

Thanks for taking the time to read this.

@Matt Stewart  Thanks for taking the time to post your reply.

Can I assume you price out your part... of the SOW? So you bring a rehab price to the JV partner for the rehab (your labor and your material purchases)... then anything beyond that you split 50/50 or whatever?

My concern with doing an equity split is... how tough is it to reconcile?   Do your partners ask for receipts?   Or do you all agree to work off the SOW and calculate profit splits?   What happens if there is a variance?  

I haven't done an equity split because of this (and maybe it's just "head trash" that I should get over). Rather, I've been opting for debt (on the lending side to the JV partner (contractor). But I would like to do Equity...

Hi BP-land!

Just looking for thoughts on how you might handle this scenario.

We are about to do a joint venture (JV) project with a contractor. It's a cash only property from the MLS. He can't put up the purchase price but he can handle all of the work to complete the project. Thus, we would purchase it, and the contractor would rehab it. How are you handling JV splits in your business?

 Here is some basic info:

$145k purchase price

$45k rehab costs

Total $190k all-in

Resale price:  $270k

There are transaction and holding costs to be considered but there is approximately $65k net profit in there.

What kind of dollar ($) or percentage (%) split should I, as the purchaser, ask for?  

Any other tips, ideas, or other considerations?       

This is a guy I know well and has experience in flipping.   If this goes well, this could set the precedent on how we do business again down the road.

Thanks in advance for any and all comments!

Dave

@Quadir Robinson

Welcome to BP!

I invest outside of Philly. Let me know if you wish to catch up sometime.

Got something? Let's dance. 😀