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Any Property Management recs in Seattle area? :(
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😂 I finally got inside. I was so excited. It had great curb appeal. I got down in the basement and it was the strangest thing I have ever seen. Part of the house was sitting on a block foundation, part of the house was sitting on post and beam foundation, part of it was supported by patio pavers. The block foundation didn’t extend to the exterior walls. One of the weird block walls in the basement was partially caving in, so they just covered the cracks with new cement. The one ☝️thing I’m not doing is putting a foundation under a house. The hunt continues. I ask what did your inspector say about that foundation when you bought it? We didn’t have it inspected we paid cash.
You seem like you know what's up, but basement space isn't worth regular space. Just saying. Also following to hear the financial advice you get.
Good point on basement sqft, I have a few other data points. Median home price 365k. Cheapest current house in the city $374,900. The comp needs a complete remodel and it’s the same size as current sqft without basement. I’m also playing into seasonality, declining rate environment. Some risk, but from the data I’ve got it looks like the margins are there. It’s an off market deal. I think it would be gone within a week if she listed it.
Coach
You could do a 1031 exchange.
Subject Expert
1031 exchange isn’t a possibility for flips. The houses are considered “inventory” when held less than a year and never put into service.
There’s something called a 1031 exchange?
per the rules and as noted above, " An exchange of real property held primarily for sale still does not qualify as a like-kind exchange". this is from the IRS's tax tips on like kind exchanges.
My assumption here is expenses from construction offset taxes. But it’s a separate bucket of income from W2. If I were to have a loss it wouldn’t offset w2 income. So this flip couldn’t benefit me if I were to take a loss. I also have a startup of a SaaS app for content creators and real estate consultancy, that utilizes data and AI. The idea is for anyone to be able to start this type of business. I build the platform. I was thinking the startup isn’t cheap. It also doesn’t fall in W2 income. So I could use the startup to offset the money I make on the flip. That’s all I’ve come up with so far.
Re your SaaS startup, R&D is now amortized over 5 years, instead of being treated as an expense in the year it’s developed, so be careful with that and don’t expect to be able to take a big write off in the first year, like you previously could.