1st time flipper
Hi Allison, what an excellent article. My husband, a remodeler by trade, and myself, a REALTOR, are about to settle on our first house. We want to turnaround in 30-45 days and resell. Flipping is something that we will be transitioning over to full time, although it may take a year or two before he can leave his business behind to do this full time. At what point are we dealers? We also want to open an LLC specifically for flipping. Does this have any effect on which we will be considered? Please reach out via email to discuss further. Would be very much appreciated! We are also having a hard time finding a local tax expert on flipping / real estate. THANK YOU!
Hi Lisa: Thank you so much. I’m so glad you enjoyed the article. You sound like the perfect team to take on flipping: a Realtor and a remodeler. Generally, you’re considered a ‘dealer’ when you flip more than one house a year, plan to flip a house in a short amount of time, or are making the majority of your income from flipping houses. There isn’t a specific dealer definition but if you do one of the three things mentioned, typically you will fall into that category. An LLC is common for flippers and a tax professional would better be able to tell you about the effect it would have on your dealer status. If you’re having a hard time finding a reputable tax expert, consult a title company, other Realtors, mortgage lenders and other investors and see who they use. Generally, at least one of them will be able to give you a referral. I wish you all the best.