I purchased a rehab for $109,500 on 12/28/09 and sold for $186,000 on 5/05/10, I was all in approx $140,000 and left closing with a check for $68,000. My question is how much in taxes will i have to pay on that money?
I have another house under contract I found sitting vacant with over grown grass 4 years ago, knocked on neighbors door and got the owners number. Owner owns house outright, his daughter used to live there and passed about 8 years ago. He said it was going to be his nephews college fund and said he was gona eventually fix it and sell it. He wasnt motivated but said to make an offer… said he wanted $185,00. I made an offer at $150,000 on l/o with $1200/month… he said no. I had called him from time to time to see if things changed but it was the same story.
I called approx. 2 months ago and left another message and his son called back and said it was for sale an they wanted $150,000-$160,000. Son said his father was a procrastinator and that he would get it moving. It was approved for sale at probate court nov.18 for $150,000(appraised at $155,000)and my wife was pre approved for fha loan with wells fargo. Got a call today sayin only way is to put 20% down because of her income, she’s a dental hygieneist with two part time jobs.
Do I just do the conv. loan with 20% of my profit from my flip and borrow the repair money from father inlaw to repair($35,000) then refi and pay off father in law and take some out to reinvest? Or show more income with my sister cosigning with wife and do the fha loan and pay my sister say $4,000 for helping?
House is in excellent neighborhood with elementary school on next street. We can see ourselves living there for quite some time while i really start to begin my R.E. investing. Similar house aroung the corner sold in July for $242,000…House in same neighborhood was just rehabbed and is listed at $239,000. Another house two doors down has been listed for awhile at $269,000 and just reduced to $259,000. Out of those houses the one i got a p&s on is def. the better house.
The house I currently live in I will rent on a l/o and cover the rent and help the t/b get approved after a year and hopefully break even as i would have to short sale to get out of it. I really would like to avoid that route as I was a straw buyer and ended up with 5 foreclosures on my credit so I am trying to rebuild my credit to help with my investing.
Just trying to weigh my options.
Thanks in advance for advise.
:help