All Forum Posts by: Mike G.

Sounds like a good idea to me. And I just voted for your original post, Bryan. :)

Will, I also go through Farmer's and have the policy through Kraftlake. Interestingly, I overpaid a bit on the renewal of the policy and I got a refund check from Foremost, so I guess they are still involved somehow.

Well it's good to know that it's not just me that's seeing narrower margins here in SoCal. :)

My investing strategy is currently in rehabbing/flipping. I have noticed that some wholesalers underestimate the repair costs (sometimes significantly) and overestimate the ARV. Maybe the deal is better for someone looking to buy and hold, but the wholesaler should specify that.

Yep, good points, Will.

Like you, I would immediately be suspicious of a wholesaler opportunity claiming only $10k in rehab costs. Most properties in decent shape in this market disappear really fast and don't need a wholesaler to find them.

Oops, sorry, Steve is correct about having to send the forms to LLCs and partnerships as well. Also, I think you have to send a 1099 to lawyers, even if they are corporations.

You don't have to give a 1099 to employees, there are different forms for reporting their income.

As for independent contractors, my understanding is that you only have to send them 1099 forms if they are sole propietorships (i.e. not corporations, LLCs, or Partnerships). You need to first give each contractor you work with a W-9 form to get their information (like address, EIN, and business entity type) and keep this W-9 on file for each contractor.

You only have to file the 1099 for contractors you pay more than $600 to in a calendar year. And I don't think you have to send that out until the end of the year (before January, actually).

But really you should consult an accountant.

Not sure if it's the same everywhere, but at our local Home Depot stores (Los Angeles area), you speak with someone at the commercial (or contractor's) desk, and if your purchase is over $2000 (or maybe $2500, I'm not 100% certain), they will send the order off to the "Bid Room". I've gotten over a 20% discount on a number of occasions. Large appliances seem to be treated differently, though.

Interesting topic, Jean. Sorry to hear about this issue you have. I heard a similar story from an investor here in California. He bought a condo at a Trustee Sale, then the HOA went to him for back-owed fees. Apparently, his lawyer ended up recommending that he pay the money. I was wondering how this was possible, but after seeing some of the other posts, it's starting to make some sense. Hopefully your case turns out differently. Good luck, and please keep us informed.

First, be careful of an online estimator for ARV. These things can be quite far off a realistic ARV. The only way to do it properly is to look at actual recent sales (ideally within the last 3 months) in the neighborhood that are comparable to the house in terms of size, number of bedrooms/baths, lot size, age, etc. And notice that I said, recent "sales", not recent listings.

Also, make sure you have a good solid estimate for the other costs of the property - rehab, holding costs, purchase and sales costs. Even if you are planning on just wholesaling to an investor, you want to make sure the person you flip to can still make a good return, or they won't want to work with you again.

With a solid ARV estimate and a good estimate of total costs, you should be able to figure out how much you can offer.