Devils in the details

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Posted by john on November 12, 2008 at 10:10:59:

In Reply to: CRE Online Update - New Article, Success Story posted by Jeanne on November 12, 2008 at 07:54:10:

$16,300. That sound nice, but people need to realize the real numbers when they do a flip. If you sell a place within the 1st year it's taxed as ordinary income and not as long term capital gain. If your income tax bracket is 28% and you pay a sales commission to a broker for 6%. Then your profit is reduced by 34% and maybe more if you include your time,fix up costs, and other miscellaneous closing costs. I admire being creative in finding a deal, but don't forget the exit strategy costs!!!!!!!!!!!

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