Wholesale Flipping - Posted by Len_PA

Real Estate Investing
1

Posted by ak newbie on May 08, 2000 at 07:37:50:

Stacy, thanks a bunch for your responses.

ak newbie (hopefully not to be a newbie for too long!!)

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Wholesale Flipping - Posted by Len_PA

Posted by Len_PA on April 30, 2000 at 06:35:22:

Does anyone out there know how to get around the problem of getting the bank to let you assign the contract? I just started doing some wholesale deals. I am working through a realtor to find most of the properties. If the property is bank owned, they will not let me assign the loan. It would be much easier for me to be able to assign the contract because I would not have to close on the property before I sold it to another investor. If anyone out there has any information to share, it would be greatly appreciated.

3

Re: Wholesale Flipping - Posted by Stacy (AZ)

Posted by Stacy (AZ) on May 01, 2000 at 04:06:37:

You may double close to avoid this problem. Sign a separate “Sales” contract with your buyer, after you contract with the bank. Close the buy, then close the sale at the same time. Find a title company that performs simultaneous (or double) closes, and they’ll make the magic work.

Stacy

4

Re: Wholesale Flipping - Posted by ak newbie

Posted by ak newbie on May 05, 2000 at 13:44:56:

Question…
I know this may be a sensitive subject, but…how are wholesale deals taxed? Do you declare them as ordinary income? I want to try this, but am very wary of significantly adding to my taxable income. Is there a way that these transactions are tax sheltered - maybe via incorporation?

Any light on the subject would be appreciated.

Thanks,

ak newbie

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Re: Wholesale Flipping - Posted by Stacy (AZ)

Posted by Stacy (AZ) on May 05, 2000 at 14:26:01:

Without a corp, these are taxed at your ordinary income tax rate. Even still, deciding not to flip a property because it will increase your income and tax liability is kind of backwards thinking, in my mind. If you don’t yet have a corp do it anyway, and plan for the fact that a percentage of your profit will need to be paid. If I want to give you $100, but you first have to agree that you’ll give me $30 back, would you do it?

Stacy

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Re: Wholesale Flipping - Posted by ak newbie

Posted by ak newbie on May 05, 2000 at 16:28:19:

You’re absolutely right!!! I’ll take $70 over $0 any day!

Thanks, for the feedback.

Another question,…Can you set up a corp, specifically for the intent of real estate investing, pay yourself a salary and benefit from the tax advantages of incorporation?

ak newbie

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Re: Wholesale Flipping - Posted by Stacy (AZ)

Posted by Stacy (AZ) on May 05, 2000 at 18:40:23:

You’re on the right track. Understanding various business entities and their particular benefits and weaknesses is another thing an investor needs to do. It’s better with the help of a team of competent professionals. A good accountant and lawyer can help you to make the correct decisions, minimizing the amount of tax you pay, and protecting you from legal actions.

For more information about doing flips in corporations, see Bill Bronchick’s site at www.legalwiz.com. look in the articles.

Stacy