Flipping Questions
I really really am interested in fliping/wholesaling can anyone answering some questions for me...
When you write the contract to purchase you put in escape clauses (contingencies) to protect your self correct?
When to go to close how do you handle the fact that you brought another buyer with you?
I hear that some Finance companies are giving the buyers of short term flipper property grief and are wary of financing such a property, What’s the deal here?
I assume it is best to flip(wholesale) to another investor/fixer upper to start?
Am I selling my right to purchase or am I reselling the house at closing to my buyer?
How would I be taxed on such a deal? Also what about closing costs? etc?
Basically I need to find a good candidate with a reasonable amount of equity, a reasonable seller. Write the contract to purchase, pay an agreed upon earnest deposit. Keep control property and sell it to another investor/fixer upper or the like. This is very abbreviated but does it sound basically correct?
Thanks
Mike W
Hmmm 23 reads and no answers...OK well I have answered a few questions on my own
but I still would like to know about ;
I hear that some Finance companies are giving the buyers of short term flipper property grief and are wary of financing such a property, What’s the deal here?
How would I be taxed on such a deal? As regular Income?
Should I LLC or Corp., and run this as a business?
Thanks
Mike W
I see the term flipping and wholesaleing used differently. To me, the terms are almost identical. I have two escrows (some don’t). The actual process to me are separate. I am a Buyer (one escrow) I am a seller (second escrow) The two shall never meet (know of each other). My buy escrow closes, right behind it my sell escrow closes.
I primarily sell to another investor. I find it easier. When I look at a potential investment do my analysis, my buyer will be looking at it the same way. I need to put myself in his shoes if I am going to flip the investment – Why Get Involved.
Regarding taxes, unfortunately all my transactions have been 1031 Exchanges. I like to keep Uncle Sam as my 1/3 partner.
My closing costs are deducted from the profits.
What ever Earnest Deposit is required on my Buy is required on my Sell.
I am a sole investor, no business. Never had a need to be anything else. When I do Partnerships, I do have Partnership Agreements.
Keep it simple. It really isn’t that complicated.
Hope this helps.