I need help this will be my first ss deal.
The market value of the house is 445K, but as we all know it won’t sell.
I made a offer to the bank for 250K, the rep from the bank told me to increase the offer a little and we got a deal.(iam thinking about 270K worst case 290K).
I have found a buyer for 370K.
Q#1)whats the best step
Before you answear my Q#1, my idea was to buy the house for 270K (all cash),OK lets use big numbers 290K and have two closings where the buyer buys from me for 370K. This leaves me of 80K in Gross profit. My expensses are 5k to home owner, 15K to realtor for hook up on this deal and around 15K for both closings.
Q#2)does my idea sound good, or you have a better idea?
Q#3)what tax will i be charged on my net income?
Q#4)have i missed any other charges that i will be charged in this transaction?
Any other advise will be helpfull :biggrin
make your offer with the Realtor commission included. This way the bank will pay the Realtor commission rather than you paying out of yo\ur proceeds. Put in a full 6% for the Realtor, if the bank does not accept it, start knocking the percentage down. You can always make up the diff on your end after close or on the second close.
The taxes depend on how you get paid. If you are paid out as a corporation ( such as an L.L.C.) then you are liable for corporate income tax. If you are paid as an individual, then you are not required to pay income tax unless you choose to. I would seek the advice of an attorney.
So far, from the outside, it looks like you got yourself a pretty good deal here. Let us know how it turns out for you.
GooD Luck! :beer
Thanks short sale negotiator. If the bank pays the Realtor commission on the initial purchase, this will cut into the investor profit margin up front. What’s the difference if the investor pays more for the property up front or makes more on the end buy, as long as the $ amount is the same? The Realtor would either get the commission at the beginning or the end. Thanks
Sounds like a great first deal. Can you explain what the $5k for the homeowner is, i.e. is that to cover moving,etc? And how do you disguise it…I have heard that the banks frown on the home owner getting any money at closing.
Thanks and good luck.