All Forum Posts by: Joe Sadusky

@Nashid Allen do you have properties under contract ? What areas specifically in Nj?

Utilizing local meetups is a great way to meet cash investors in your market

@Wayne Brooks what do you mean the taxes are ordinary income? 

is the self employment tax of 15.3% applied towards the capital gain on the sale only? Or based off of the price the house  actually sells for? 

@Patrick M. I haven't run into that problem and never heard of that happening. 

If that were to happen, I have specific language in my lease agreement for payments not going thru.  They would be charged a fee for the payment not clearing and then required to pay future payments by certified checks or automatic payments connected to their account. 

Hey BP!

Have another tax related question that I'm hoping someone can help me out on. 

Up to this point, I have done Buy & Hold on all of my investments so I am not sure how taxes work (aka capital gains) on a fix & flip bought and sold within a year period.

A family member is exploring buying a fix & flip property thru a renovation loan (conventional). 

She currently does not have a house and would be a first time home buyer and is trying to keep all of her options open (quick flip, buy & hold as a rental, or occupy the property for a short period). 

Would it make more sense for her to hold onto the property for the 2 year period to avoid the capital gains? 

How would it work if she were to sell before the one year mark? 

As she is trying to weigh her options, I am trying to help advise how the transaction could effect her come tax time. 

Thanks in advance for any help! 

@Jeremy Torres you can send them a vemno payment request. Instead of selecting "pay" you do "request". You can also send reminders for payment requests that have not been paid 

Hey Guys! 

I have a tax related question for an off-market deal that I am about to get under contract. 

Quick rundown of the situation:

Client is living in a property that was purchased by his sister in 2002.  She bought the house for $120,000 cash and there is no mortgage.  The house is in really rough shape and my client wants to sell the house to us for an agreed amount of $95,000. 

He is asking about taxes that would need to be paid due to the sale of this property (to be incurred by the owner- his sister). 

Since she will be selling me the house for less then what she bought it, is there no capital gains?

What other taxes would she need to pay for this sale (approx.)?  The property is in PA. 

Thanks in advance for any help! 

@Michael Hartman 

Yeah its a historic town with older houses.

The main street in town is really nice- brewery, restaurants, diner, shops. Overall, Mt Holly is on the rise.  Town kinda has had a bag stigma- but overall its a nice place to live and I enjoy living here. Properties are being fixed up flipped. 

Property taxes are not horrible.  I have a large Victorian twin, 2750 Sf, nice sized property. Taxes are $5000.  My two rentals in Edgewater Park are also large twins and the taxes are around $5,000. 

Its not Moorestown or Mount Laurel- but its also not bad.  I get great cashflows in both towns.  I dont focus on investing in A graded towns. Usually a lot more expensive to buy into and not nearly the cash flow that I can get.  I have a very comprehensive tenant screening process. As long as you get quality tenants in your properties... its a win in my book. The school systems are nice and there is a healthy rental market.   I've also kinda found a niche market in the large twins and have been able to set and collect top market rent. 

@Kevin Korejko welcome to BP!

Lots of useful information on here that should be a huge help to you as you are starting off in REI.

I am full time Civil Engineer and have been getting into REI while working my full time job as well. I haven't reached financial freedom quite yet.. but I am making my game plan to get there!

I have two rental properties in South Jersey that cashflow pretty well and also have my real estate license. 

Would be great to talk more and see if we could help each other out or possibly work together in the future. 

Best of Luck! 

@Michael Hartman I have not personally invested in any multis in the area YET... but have been evaluating quite a few properties in different towns. 

My primary is in Mt Holly and there is a pretty healthy rental market in the area. Properties value in the area has been increasing and overall I see this market as continuing to improve. I wanted to purchase a triplex that was for sale right down the street from my house... but could not get the money together for the down payment in time. Just went under contract... my estimates were about $1,500/ month cash flow. 

I own two single familiy rentals in Edgewater Park that get great returns.  I have also looked in the Pennsauken area at multifamilies and was just talking with another investor who is situated to make some nice cash flow in that area as well. 

Feel free to shoot me a message to talk more.  Would be glad to help you run some numbers on properties and help find you a good deal. 

Best of Luck!