Anyone here in a household doing house/property flips while working a low wage job? (4%, fees)

[MaxTheDog]

Meaning keeping it under 75K per year so you don't pay any taxes on the long term capitol gains?

Seems like the easiest way for a mostly unskilled Couple to make it in the world.

Especially if one of them is in Construction.

Just curious how it's went for you so far...



My husband is a Painter. He's a great painter but a terrible business man not charging enough $$

I work a low wage job ($13.20 per hr/45.5 hrs per week).
Most weeks I work 3 days straight with 4 days off per week. And i am paid to sleep getting about 6 hrs per night in a comfortable room. Plus paid a little for gas $$ ($12.50 a week to cover 25 miles). Benefits are pretty good, Dental has saved us thousands this year. Crappy 401k plan matching 4% yet already paying out $2 in fees after the match per month.

We bought some land and will be able to flip it in a few months. Holding it for one year. We will make about 35K and pay no taxes on that. I don't expect to do that good in the future but something equating to 1K extra per month, tax free, is my minimum goal.

I'd like to make friends with other couples in the same situation but assume as we get closer, we would share info and there are very few valuable flips in our area of California. Everything is so expensive.

[FalconheadWest]

Originally Posted by MaxTheDog

We will make about 35K and pay no taxes on that.

Why do you think you won't pay taxes on this $35,000 profit? The only time you don't pay capital gains is if it's your primary residence for 2 out of 5 years and it's below $250k/500k, depending on single/married.

This is land, which means there is no primary residence there. Please tell me how you get to pay no taxes.

[MaxTheDog]

Hopefully I can explain it correctly. Mathjack is better at it thanI. I've also verified his info. If you are in the 10-15% tax bracket, you are not taxed on Capitol gains. Here is the best explanation I've found
https://www.nerdwallet.com/blog/taxe...ins-tax-rates/

It's like pouring sand into a pail. I make $32K per year, about. Anything over that...up to 75K per year, isn't taxed if it is held for over one year. One year and one day, to be exact.

So you'd need to be lower income to be able to do this.


But you are ALSO correct. If we were to live on this land (and it shows an old cabin from 1924-300 sq feet though there really isn't...just a few boards....)I believe if we called it our primary residence and lived there 2 years or more, we'd also not pay any capitol gains.

But we just don't make enough money to need to wait 2 years.

75K
-32K
-----
43K

My husband will show making about 10K this year. He mostly did hospice for his two elderly parents.

43K
-10K
-----
33K.

There is also the personal exemptions, standard deductions which equates to about $20K for us. So we can make 20K more, actually than 75K. It is actually 95K.

[scgali]

Well my dad and his mom were both blue collar (he was a police officer and she was a bank teller) employees and bought apartment complexes. They stayed far away from flipping and bought one 9 unit complex, one 8 unit, and two 4 units. They started with the 9 unit complex and each lived in their own units while renting the other 7. My grandma then bought her own 8 unit and moved into that complex while my dad stayed in his 9 unit. They each managed the complexes so didn't spend on property managers. Eventually they each bought a 4 unit complex as well.
They never leveraged properties against properties and weren't trying to get rich quick like many of the flippers I've know, most of whom fail.
Now they were both very comfortable in life. My dad retired at 39 and eventually bought a nice home for cash when he was 45. He lived in the apartment complex until then.
My grandma bought a nice condo on the bay for herself eventually as well. All the properties they purchased were during recessions. This was in Newport Beach and in the 60's up to the early 90's so they did well.
But what I want to stress is that I haven't known many flippers who have been very successful. Greed and instant gratification tends to win over and people end up loosing everything.