All Forum Posts by: Account Closed

I think I may just have to do owner financing, and it would defer his taxes over time, but not completely avoid them.

The seller is 75 and on social security so he doesn't have income.  If I 1099'd him say $25k per year, he would be in the lowest tax bracket and not pay income taxes.  It's also my understanding he can't 1031 since it's been his primary residence for 40 years.  If I did pay him a consulting fee and bought it for $270k, would I be shooting myself in the foot when I go to sell it?

I have a scenario for a potential purchase. Basically the guy bought his house a longggg time ago for $20k and wants to sell, and we agree on a $450k sales price. Is there a way to pay him $270k "on paper" so he doesn't get hit with a long term capital gains tax at 15% and then pay him the remaining balance of $180k over time through a consulting agreement or other instrument where he would avoid the tax. On top of that, could I set my basis at $450k when I sell it? I wouldn't want to do him a favor to avoid tax, but then have my basis be $270k and then I get hit but a huge tax bill when I sell for say $550k, which would wipe out my profits. Is this above board or is there another way to approach this?

Hi All - 

I've a handful of thoughts/questions so I'll be short and sweet.

I'm currently focused on a couple of select areas in Houston for my motivated sellers search, and one of the areas is West U.  I've gotten good responses to my mailers and I'm about to get a house (lot value) under contract.  I know I'm buying at a great price and will either wholesale or wholetail it but not quite sure on how to go about it.  Was thinking of maybe just driving around or looking on HAR for new builds and emailing the builders?

Second question - I have a scenario for a potential purchase. Basically the guy bought his house a longggg time ago for $20k and wants to sell, and we agree on a $450k sales price. Is there a way to pay him $270k "on paper" so he doesn't get hit with a long term capital gains tax at 15% and then pay him the remaining balance of $180k over time through a consulting agreement or other instrument where he would avoid the tax.  On top of that, could I set my basis at $450k when I sell it? I wouldn't want to do him a favor to avoid tax, but then have my basis be $270k and then I get hit but a huge tax bill when I sell for say $550k, which would wipe out my profits.  Is this above board or is there another way to approach this?

Finally, does anyone in Houston have a good accountant that specialize in real estate?  I'd like to work with someone specializing in real estate that can help me think through scenarios above

Thanks in advance!

Harrison

I am by no means an expert in this field, but $300k seems low for the amount of risk, plus you're missing costs like carrying costs, realtor fees (you'll still have to pay the buyer's agent), etc.  So much can go wrong in a project like this.  Even at $300k, your looking at only a 13% return, and I actually think it's closer to 5-10% realistically and I'd imagine on a project of this size you'd want a large buffer around 20%.  Again, I've never done anything like this, just my two cents.

@Greg Dwyer  Cash purchase price of $70k, $6k in repairs/updates, rent for $900-950.  Not a home run but a solid deal with upside.

I have a couple list source lists I've pulled in Harris county for mailers. Let's work together as I have a few additional lists I'd like to pull

Thanks for everyone's help!

@Jeremy Pakalka  Thanks, do you have a contact over there?

Houston BPers -

I just got my first rental house in Houston under contract and was wondering which homeowner's insurance firms / agents / brokers you guys use.  The house is at 3562 Noah, Houston 77021 in a rougher neighborhood.  The house is older (1949, but solid brick and in great condition) you can look it up on HAR.

Just looking for insurance recommendations/contacts so I can start shopping around.

Thanks!

Harrison