I’m new to this subject matter (flipping houses), but I’ve been trying to do my homework.
All of the books that I’ve been reading seem to suggest flipping as an individual enterprise, rather than structuring it as a small business.
Is it possible to own a small business flipping houses? Or is it silly from a tax standpoint?
I’m thinking of the quick turn-around process, rather than a holding strategy, and I don’t want to do a 1031 exchange, so I will be paying full taxes on any profit. I don’t really know how to figure out which structure would be best, tax-wise.
I’m planning on contracting the work on the house, and doing the landscaping myself. So, I have some big expenses coming up: vehicle, tools, small-scale landscaping equipment, furniture for staging, storage space for same, etc. Plus, I would love to set up a home office.
You’ll probably tell me to talk to my accountant, but I thought I’d ask here anyway.
:cool okay first of real estate is a business the form it takes is up to you !! YES getting a llc set up has it s plus side and it will allow you to keep your personal money from the bussines money YES there are tax breaks running things out of your home as well // it all is how you see it can you keep a part of your home apart from the rest for only business ???
THE big thing is where are you going to get all this money for the things you were wantting to get as far as the landscape stuff this is a lot of money for this alone let not forget the money to get the homes to rehab and the rehab money ??
DO you have any kind of aplan layed out to follow ?? IF no you are in trouble at the start !!!
I guess what I’m trying to figure out is the tax difference between paying full taxes on profit as an individual investor, or doing it through an LLC. I’m reading like crazy, but there must be something that I’m missing.
As far as finances, I am indeed working on a plan. I think I can qualify for the mortgage with my current cashflow. I’m landscaping my own property and doing a few things inside to up my appraisal. I hope to cash out the equity to use for the rehab. This will provide a downpayment for the new vehicle, too. And I actually only need a few other small things for landscaping, which I hope to purchase with the equity money also. I just recently qualified as a real estate broker, so I’m trying to figure out what to do with that, too.