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Thursday, February 03, 2005

House 2 Already Sold

Just got the call today that the property was sold.

5 comments:

Matt J said...

Shaun,
That's too bad you didn't get the house. I'm sure you'll find another great deal like that sooner or later. But even 20% below TMV is a pretty decent price for their average deal. Find one that doesn't need much work on it and you will be golden. When you do buy a house like that and then resell, what kind of and how much tax do you pay on your profits? Will it vary on how much you make on a deal?
-Matt

Shaun said...

I'm waiting for clarification from my CPA on the tax issue. It really depends on how the IRS classifies your business, which also depends on how you have structured your business. If your LLC is set up as a partnership, from what I understand, the profits are taxed as capital gains and also as self-employment income. If you LLC is taxes as an S-corporation, the profits are taxed as ordinary income. What your business goals are has a large role to play in this. If you are solely flipping properties, you would likely be classified as a dealer. This is a pretty complicated issue and I would suggest consulting a CPA about it. But really, just get out there and do the deals. Worry about the taxes once you have your profits!

Steve said...

Sorry to hear about the house being sold. But at least you are 'hitting the pavement', so-to-speack, and making offers. How many properties do you currently own? I know you mentioned your first(?) was an L/O. Do you still have it?

I am trying to get an FSBO now myself. The owner appears motivated from her listing, but I have yet to talk to her (not from lack of trying either). The house is for $115k, and comps have it around $120-125k. She has an assumable VA loan ($44k originally) from 1992 that probably has a balance now of ~$35k. The good part is her ad says "Willing to Negotiate", which opens up a plethora of options.

We'll see what happens.

Regards,
Steve

Visit my REI blog!

Shaun said...

My L/O was sold about 6 months ago (see the "It's Done!..." post under "Key Posts" to the right). I've been reading your blog and following your efforts to get in contact with that lady. Assumable loan! Sweet! AND willing to negotiate! What more could you ask for! Well.. I suppose an actual conversation with her would be nice :-)

Steve said...

Bah! I even read that entry in your blog a while back. I guess I've oversaturated my brain with REI, I'm now starting to forget things. I read your's and Joe's blogs daily myself. Very enouraging! Keep up the good work!

Regards,
Steve

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