All Forum Posts by: Wilson Churchill
Wilson Churchill has started 8 posts and replied 461 times.
Post: Tax Help on Fix and Flips
- Madison Heights, MI
- Posts 471
- Votes 132
Originally posted by @Dave Foster:
Winston,
To be eligible for 1031 the type of real estate is irrelevant. It is the use that is key. The statute refers to qualifying property as being "...held for productive use in business or trade or for investment." Fix n flip property no matter the type is considered inventory and when being held primarily for resale cannot be sold using a 1031.
Right. A property used in business is business property, and a property held for investment is investment property..
Post: Tax Help on Fix and Flips
- Madison Heights, MI
- Posts 471
- Votes 132
Originally posted by @Joseph Accetturo:
Ned, that is horrible advice.
S-Corp is a nightmare. Banks won't lend you the money in an S-Corp. If you need to refi they will make you take the property out of the corp. This will trigger a taxable event.
Putting property into an S-Corp vs cash also creates a gigantic headache.
Always use an LLC no S-Corp status. In an S-Corp you MUST pay yourself a reasonable wage. Thus, you will not escape SS taxes unless your making serious money with the business. Now if you have enough cash in an IRA of sorts you could buy and sell properties through that vehicle to defer taxes all the way to retirement. You could also use 1031 Exchanges to accomplish the same thing.
Ned, don't hand out tax advice if that is not your area of expertise.
My understanding about 1031 is that it cannot be used for "flipping", i.e. business property. It only applies to "investment" properties.
Post: Tax Professionals and Random Number Generators
- Madison Heights, MI
- Posts 471
- Votes 132
Is there a link to the actual test? I'm up for a challenge.
Post: The 2% rule is the most brilliant ever
- Madison Heights, MI
- Posts 471
- Votes 132
The idea behind the 2% rule, from what I have read, is the ability to finance at 100% and still have a certain amount of minimum cash flow. Of course different markets will have different ratios. The 2% rule is designed to allow maximum leverage. That said, why not try to get the best ratio in any market? It is easy to pay full price for a property, but it is better to buy at a discount (which can improve the ratio and ability to finance dramatically). IMO, properties should always be purchased at a discount from the market price. In this rising market, I have focused on buying the "cheapest" homes in my target markets. For the MLS, this requires going to the selling agent on the first day of the listing and trying to close a deal immediately..
Post: Lowest-Cost Rental Insurance - Michigan, Oakland County?
- Madison Heights, MI
- Posts 471
- Votes 132
Originally posted by @Scott K.:
I have Nationwide its about 52 a month on average for my 3 properties
Who is your agent? I just called the main number for a quote. They said I also had to insure my primary, and quoted my primary at 2300! My current policy is only around 700 on my home, so...
Post: Is BiggerPockets for Quitters?
- Madison Heights, MI
- Posts 471
- Votes 132
It was those late-night Sheets infomercials that inspired me, about 10 years ago.. Biggerpockets is awesome, though. It's a great place to meet other local investors.
Post: HELOC on an investment property?
- Madison Heights, MI
- Posts 471
- Votes 132
Also, PENFED will do 3 or 4, but they said you already have to have a first lien on the property..
Post: Lowest-Cost Rental Insurance - Michigan, Oakland County?
- Madison Heights, MI
- Posts 471
- Votes 132
I know that Farm Bureau used to offer the best rates on rentals years ago. I am not sure if that is still the case, but I have a quote in process. Please recommend other companies.. Thanks!
Post: HELOC on an investment property?
- Madison Heights, MI
- Posts 471
- Votes 132
Navy Federal Credit Union will go up to 70% LTV, but they only allow 4 financed properties "total", meaning from any financing source, or so they say.
Post: Thoughts on Buy and Hold in Detroit
- Madison Heights, MI
- Posts 471
- Votes 132
Originally posted by @Scott K.:
Originally posted by @David Roberts:
scoot that's the thing, where are the troublemakers going to go? I don't know a thriving detroit. I haven't been alive long enough and i expect that i will never see it in my time.
You are right. They are slowly but surely coming to a suburb near you. The only difference is the burbs won't put up with that garbage. We all have guns and we also call the cops. We must never give in to the fear of them.
Burn their house down if needed
Last time the city things rioted, they burned their own businesses and homes down. People in the suburbs locked and loaded, with some camping on their roofs with rifles. If there is another riot, and they are dumb enough to try to burn our neighborhoods down, we will bury them...