All Forum Posts by: Susan K.

Thanks everyone for the input.  I guess when I had read some posts on BP many of them mentioned that flipping is not a good tax strategy so I think I was confused by that.  I was thinking that if you had a "flipping" business maybe some of the IRS rules were different than if you had say a "widget" business.  But if they are treated equally under the IRS then that answers my somewhat confusing questions.  I'm one of those that if I have a nightmare it involves either getting struck by lightening or getting called into an IRS audit.  

If flipping is a bad tax strategy or one of the worst RE strategies as far as taxation, how DO you make money by flipping? I have read many different posts that talk about how if your goal is to minimize taxes, flipping isn't the business to be in.

This is where I am stuck. I believe to make money you of course need to minimize your taxes. What kind of tax percentage are full time flippers paying? If my goal is to become a full time flipper am I just shooting myself in the foot at tax time? Am I just “buying” myself a job? How do I set myself up so I don’t have to give all of my profits to the government? Even with a good CPA is it worth it?

Also, with Trump’s proposed tax plan eliminating many deductions what is your opinion on how this may affect the flipping business?

How can they possibly have good credit scores if they are involved in a current foreclosure?  This would hit their scores down to nothing.  Also, having credit card debt would ding it down as well.  Did you see the actual score?  Something sounds weird.

Just a side note here: Make sure you review all of the financials for the HOA you are buying into. Check for adequate reserves, age of roofs in the complex and anything that can significantly raise the HOA fees down the road. Also review any rental restrictions in there. I used to live in a condo and it turned into a prison camp with rules and restrictions changes. The monthly HOA fee started out real low and ended up quite high over a 4 year period. Not meaning to sound negative, just do your homework and it will be ok. Good luck.

As far as taxes if she is 1099ed (and most likely is) often you can have enough expenses to run against the income to zero out paying taxes on much of it. Did you happen to see the % on MLS? Was it 3%?

Can you talk the seller into paying your agent at least?  He should be paying this instead of circumventing.

The seller is going to great lengths to get out of paying a commission of most likely under 10K.  Definitely unethical.  I agree with the other poster, I would be hesitant to do business with a guy like that because you don't know what he will do to you.  Since he is "cheap" would he strip the property too?

And the daughter, is she unethical too?  because now it looks like you will be doing a contract with her.  

As an agent, I've had other agents on occasion try to screw me out of commissions and it's not a good feeling. 

I was an executive assistant for many years, also did estate management outside of the U.S. for a few years. Have been a real estate agent for over a decade. Currently working like a dog finishing the rehab on our primary house. Getting a HELOC and planning to buy another investment to rehab and flip. My husband has W2 income which is making this HELOC possible. Our goal is to get to a point where we have enough positive cash flow from RE that we don't need any W2 situations as far as work. We don't have pensions so real estate investments are our only hope for eventual retirement.

I've been calling a lot of banks lately and most are 80%.  US Bank though is 90%.  Also I found a credit union in my county that will do up to 125% so you might want to check those in your area.

Hi,

I don't know about CA, but here in Florida it is very easy to go to the State of FL website and set up your own LLC on-line. The first time I needed an LLC I had an attorney do it for me and soon after I learned how easy it is to set it up yourself in Florida. You can be your own Registered Agent as long as you have an address that can receive mail service. (At least that is how it works in FL.)

Thanks Tyler.  I'm starting to make calls and I am finding the majority want you to keep the line open for 24 months.  Understandable, but I may sell the house before then.  I'll look into US Bank, 500.00 is not bad from what I've seen so far.  Thanks.