All Forum Posts by: Jake Baker

@Wade Wisner

I have been doing flips and BRRRRs in Jax for five years. I will send you a PM for some agent referrals. 

We pretty much only do BRRRRs since flipping has been unreliable for us over the last couple of years. I have changed my rental strategy to short-term rentals and co-living (rent by room) to allow for more cash flow. 

@Annie Anson

Working with a Property Manager:  If you hire a property manager for on-the-ground tasks like maintenance, you can still meet material participation—if you handle the majority of the work that drives the property’s success (e.g., guest services, pricing strategy, advertising). The key is ensuring you work more hours than anyone else on the property, including your property manager.

Keep a detailed log of your hours spent on the property—managing listings, coordinating cleanings, marketing, and even initial decorating/setup all count.

Some CPAs are conservative and hesitant to qualify STRs as active, particularly when property managers are involved.

@Colton Bridges

Are you looking to refinance before or after the fourplex conversion? 

Will you be living in the property? 

I agree with @AJ Exner about seasoning. Conventional lenders typically require a 6-month seasoning period from purchase before they’ll consider the appraised value for a cash-out refinance. It may be worth waiting the 6 months to refi into better terms.

@Jason Malabute I totally agree! 

I use QuickBooks Online (QBO) for my flipping business, rental businesses, and bookkeeping clients.

QBO has every feature you need to run a business, excellent reporting features and integration with other software. It is the most popular software in the industry, and most Tax Preparers are familiar with it, which makes tax season easier.
However, many on the forums will advise against QBO. It can feel like feature overload. The main reason is that it is not initially set up for a Real Estate business like other “real estate-specific” accounting software. It takes a certain level of QB knowledge to set it up correctly.

@Travis Boyd

Consult a CPA or attorney specializing in real estate investment before forming an LLC. They can guide you on tax advantages, asset protection, and multi-state strategies.
A HELOC is a smart way to leverage your equity—ensure your financing structure aligns with your long-term goals.

Since you plan to add multiple properties annually, consider setting up bookkeeping and financial tracking systems early to streamline your operations.

Best of luck with your BRRRR journey—it sounds like you're off to a strong start!

@Ludwig Koeneke

I agree with @Jonathan Greene that you shouldn't pay for an appraisal twice. If you are concerned about the house's value, have an agent in your area comp the house for you. Share your comps with the appraiser during the refinance stage to help justify your ARV (After Repair Value).

@Xavien Rafael Great points here! 

@Kevin Sobilo I too preach the profit first methods. It has been a gamechanger in my business.

For my flipping business, I prefer to use fewer software programs to streamline things. It's easy to get bogged down by too much software in today's world. We use DealCheck to underwrite deals and QuickBooks Online for everything related to accounting and numbers.

Classes allow for separate P&Ls for each property.
Products & Services enable us to track each 'phase' of the rehab.
Projects give us visibility on my projects
My CPA can easily access the reports for tax preparation.

@Derek Buehner

The timing of your improvements plays a big role in determining their tax deductibility. Since you're currently using the property as your primary residence, the cost of improvements made before it's placed into service as a rental wouldn’t typically be immediately deductible. However, these costs can often be added to your property's basis, which helps reduce capital gains tax when you sell the home.

Once the property is officially a short-term rental, subsequent repairs and maintenance would likely qualify as deductible expenses. It’s always a good idea to consult a tax professional or real estate bookkeeper to ensure you maximize your deductions while staying compliant. STRs have unique tax considerations, so setting up the right systems early will save you headaches down the road!

@Carter Mayberry

Refinancing your FHA loan into a commercial loan and transferring the property to your LLC is a solid strategy, but here are a few points to keep in mind:

FHA typically requires a one-year ownership seasoning period before refinancing is permitted. However, since you're switching to a commercial loan, this may not apply—check with your lender for specifics.

Be aware of closing costs and potential prepayment penalties tied to your FHA loan. Transferring ownership to your LLC might trigger transfer taxes or reassessment, depending on your local regulations.

Commercial lenders will evaluate your loan based on the property's cash flow (DSCR) rather than your personal income, which is great for freeing up your DTI. Ensure the property appraises at its updated post-renovation value to maximize the equity you can pull out.

A refinance isn't a taxable event, but transferring ownership to your LLC may affect depreciation or future capital gains. Consulting a CPA is a must to navigate these nuances.

Double-check these details with your lender and CPA to avoid surprises and keep scaling smoothly. Good luck with your next deal!

@Reeves Bennett

We do many Flips/BRRRRs annually and fund with Hard Money and Private Money. Hard Money will fund 90% of the purchase price and 100% of the rehab on a draw schedule.
Our Private investors will fund the remaining 10% of the purchase price, the first portion of the rehab (to be drawn later from the HML), and the holding costs. Of course, with private lenders, you must give up equity or a return on the debt.

I agree with @Jonathan Greene that the BRRRR market is difficult right now. Perfect BRRRRs, where you pull all your invested money back out at the refi, are very unlikely. However, the end goal can still be profitable. We have adapted by changing the rental strategy to Co-Living (rent by the room). This has created much more cash flow, which makes up for the more money left in the deal.