Posted by Tony-VA on January 09, 2003 at 15:57:12:
The dealer status tax treatment can be a burden. Tax Attorney John Hyre has an “Aggressive Cash Method” that he uses to legally reduce the current year burden.
He had a post here (listed under something like “Insomnia”) that described it. I can’t recall if his article on Dealer Status covered but I imagine it did. Check the “How to Section” here for that article.
He also covers this topic in his KISS Accounting course (available for sale at this site). This course shows you step by step exactly how to make the entries into quickbooks.
avoid negative cashflow getting started? - Posted by jim fisher
Posted by jim fisher on January 09, 2003 at 13:24:46:
just moved to western city with many mobile home parks. also just read lonnie’s “deals on wheels”. for one deal per month for a year scenario (buy $2500, sell $5000/with $500 down, avg. expense $500). ran some numbers for first year cash flow with dealer status tax consequences included, came up with over $40,000 out of pocket first year using all my own money, vs. over $2,000 out of pocket if selling part of cash flow from each note to investor for $2500… also dusted cobwebs off hp 12c to play with IRR and got around 40% return if using my money, vs. over 110% when selling partial cash flow to investors! question: do these numbers look correct, and if so how to avoid negative cash flow first year as newbie investor with limited cash, any way other than lease/options rather than buying? thanks!