Does anyone here flip houses?

Farmwithjunk · Jun 6, 2006

( There is a disclosure that an agent must legally pass on to and have signed by a perspective buyer that insures the buyer knows that the selling agent is also the owner of the property.
Its true there could be some ethical issues with an agent selling their own property but its generally not a problem. Ideally, a sellers agent must always work in the sellers best interest but is also legally obligated to disclose known defects to the buyers. So there are certain ethical standards that you must meet as a licensed agent that you wouldnt have to worry about if you didnt have a license. With that in mind, all you guys that are avoiding buying from licensed agents, It may be worth considering that buying from an agent is safer than buying a FSBO. If theres something wrong with the house, they had better tell you about it or face legal recourse. )

I'm not sure of specific wording, but in Kentucky, a REal Estate Agent can sell a house THAT THEY OWN, as if they weren't a licensed agent, so long as they explain that before hand. That allows them some leeway on the disclosure of faults with the house. (Daughter just bought a home from a licensed realtor. That realtor explained the disclosure laws before closing. She kept it a secret that the vacant property next to the house in question was sold and re-zoned light industrial)

Farmwithjunk · Jun 6, 2006

( There is a disclosure that an agent must legally pass on to and have signed by a perspective buyer that insures the buyer knows that the selling agent is also the owner of the property.
Its true there could be some ethical issues with an agent selling their own property but its generally not a problem. Ideally, a sellers agent must always work in the sellers best interest but is also legally obligated to disclose known defects to the buyers. So there are certain ethical standards that you must meet as a licensed agent that you wouldnt have to worry about if you didnt have a license. With that in mind, all you guys that are avoiding buying from licensed agents, It may be worth considering that buying from an agent is safer than buying a FSBO. If theres something wrong with the house, they had better tell you about it or face legal recourse. )

I'm not sure of specific wording, but in Kentucky, a REal Estate Agent can sell a house THAT THEY OWN, as if they weren't a licensed agent, so long as they explain that before hand. That allows them some leeway on the disclosure of faults with the house. (Daughter just bought a home from a licensed realtor. That realtor explained the disclosure laws before closing. She kept it a secret that the vacant property next to the house in question was sold and re-zoned light industrial)

h2onut · Jun 6, 2006

Buy a house buy a job. I would only buy if I could pay someone to fix it up and still come out with 20% profit. Too much risk. Rather than watch the late night get rich quick in the house flipping industry why not try network marketing? I started with a great company a 10 months and have built up a $2,500 a month with no investment or risk ever.

h2onut · Jun 6, 2006

Buy a house buy a job. I would only buy if I could pay someone to fix it up and still come out with 20% profit. Too much risk. Rather than watch the late night get rich quick in the house flipping industry why not try network marketing? I started with a great company a 10 months and have built up a $2,500 a month with no investment or risk ever.

RayH · Jun 6, 2006

( Buy a house buy a job. I would only buy if I could pay someone to fix it up and still come out with 20% profit. Too much risk. Rather than watch the late night get rich quick in the house flipping industry why not try network marketing? I started with a great company a 10 months and have built up a $2,500 a month with no investment or risk ever. )

I really wish I could do something like marketing, I just dont have the personality for it. Thats why I stunk at being a realtor.
Its fine if iflipping turns into a job, thats my goal. If I could turn it into a full time job, I would be all up in that. If I could net $30000/year after taxes and expenses I would be happy as a pig in shi---mud.

RayH · Jun 6, 2006

( Buy a house buy a job. I would only buy if I could pay someone to fix it up and still come out with 20% profit. Too much risk. Rather than watch the late night get rich quick in the house flipping industry why not try network marketing? I started with a great company a 10 months and have built up a $2,500 a month with no investment or risk ever. )

I really wish I could do something like marketing, I just dont have the personality for it. Thats why I stunk at being a realtor.
Its fine if iflipping turns into a job, thats my goal. If I could turn it into a full time job, I would be all up in that. If I could net $30000/year after taxes and expenses I would be happy as a pig in shi---mud.

CurlyDave · Jun 6, 2006

Huh? I've alwas considered my rentals as owner-managed and therefor active. I thought passive was used only for a limited partner or other situation where somebody else risks losing money before the taxpayer is at risk. What am I missing here?

Far be it from me to give tax advice, but unless the rules have changed recently, real estate investment is a passive activity by IRS rule, unless you are a licensed agent.

The difference is that if your adjusted gross income exceeds a given amount, losses can no longer be deducted from income, but must be "carried forward" to offset future real estate income. Consult your tax preparer.

CurlyDave · Jun 6, 2006

Huh? I've alwas considered my rentals as owner-managed and therefor active. I thought passive was used only for a limited partner or other situation where somebody else risks losing money before the taxpayer is at risk. What am I missing here?

Far be it from me to give tax advice, but unless the rules have changed recently, real estate investment is a passive activity by IRS rule, unless you are a licensed agent.

The difference is that if your adjusted gross income exceeds a given amount, losses can no longer be deducted from income, but must be "carried forward" to offset future real estate income. Consult your tax preparer.

California · Jun 6, 2006

( What am I missing here?

The difference is... )

Ok, that makes sense. What I'm missing is numbers (AGI, r.e. losses) high enough for the carryforward rule to make much difference. I did encounter that with y2k stock losses a while back.

I can see it would be important for someone whose primary income comes from r.e. transactions.

California · Jun 6, 2006

( What am I missing here?

The difference is... )

Ok, that makes sense. What I'm missing is numbers (AGI, r.e. losses) high enough for the carryforward rule to make much difference. I did encounter that with y2k stock losses a while back.

I can see it would be important for someone whose primary income comes from r.e. transactions.