All Forum Posts by: Mark Nickoson

Welcome to BP @James Sorge,

    Congrats, you did well with your first flip.  As you build your systems and business, don't forget that an occasional buy and hold can do wonders for you income tax return.  The depreciation really helps to offset the income.

Mark

Did you at least get a rent-free vacation out of it? 

Yea, I think I'd sell too.  You didn't include management expense in your figures.

@Jorge Torres, (first line of your last post) you learned to put <what?> under your name?

Don't know about the deposit.  If you are in an urban area you better check the zoning.

I've never done a cost segregation but if I were going to do one, I'd look for the rules at the IRS.  And thanks to Google you can know too: 

https://www.irs.gov/businesses/cost-segregation-audit-techniques-guide-chapter-3-cost-segregation-approaches and probably more important Chapter 4

https://www.irs.gov/businesses/cost-segregation-audit-technique-guide-chapter-4-principal-elements-of-a-quality-cost-segregation-study-and-report which has the 13 elements of a quality cost segregation study.   

Mark

@Clayton Coombs, My advice is to pepper your flips with an occasional buy and hold.  I've been doing my own taxes for years.  I've hated it.  It has taken me way too long and I've missed a few deductions along the way.  But, I think it was worth it for me learning the principles.  You'll need to learn the principles too, because it is up to you to provide the receipts for your purchases and your activities.   Here are a few things I'd recommend reading:

IRS Publication 527 Residential Rental Property

Pub 535 Business Expenses

Pub 551 Basis of Asset

Pub 583 Starting a Business and Keeping Records

Pub 587 Business Use of Home

Pub 945 Depreciation

If you are just flipping, you won't get to use some of these concepts, but the more units you own, the more depreciation becomes your friend.  There are advantages and disadvantages of corporations.  Your CPAs and lawyers can help you with those concepts.

Don't forget to get @Amanda Han's book here on BP.  She's done a few podcasts too.

I like @Carl Fischer's strategy of using funds out of Self-directed IRAs, but I haven't used it yet. 

Use 1031 Exchange when you can.

Hopefully someone can advise you better for purely flipping.

Mark

@Mindy Jensen, I listened to the podcast yesterday.  I told Nick's story to my kids at the dinner table tonight.  Kids are 17, 9 and 7.   What an inspiration.  Nick, thanks man. 

@Matt Ward, Yep. 

@Jameson Sullivan, I am a small time investor with only three properties.  Over the years I've come to the conclusion that tax incentives is a good way to boost the return of your investments. But like you, I after looking at this tax incentive I concluded it did offer much to small guys like me.