Posted by Brent_IL on January 20, 2004 at 11:22:05:
I?m not a dealer. Dealer status was never a problem because I hold for investment. I use other entities to take title, primarily trusts. No inventory. Because of the intermediate-term sandwich position, it?s not a flip or an in-and-out transaction.
Does it matter as long as it cash flows? - Posted by gb
Posted by gb on January 19, 2004 at 17:37:10:
Hello.
I live about 15min away from an area that has all townhomes. I would like to target these home owners and try to buy a few of these townhomes, sub2 or with private financing. I plan to rent these townhomes (sec8), because the area is a low appreciation, I can buy these at very good prices and rent them with a positive cash flow of 300-500+ per month. I am not really interested in appreciation as much as cash flow. I would like to buy about 15 of these. I would like to ask what you guys think about this strategy, buying for cash flow instead of appreciation. Thanks.
My favorite strategy. - Posted by GL(ON)
Posted by GL(ON) on January 20, 2004 at 07:13:10:
This is the sort of deal I have been recommending on this site for years. Get the pos cash flow and be happy. Don’t write off appreciation either. Even if it is low, your houses can double in 10 or 20 years. The real fortunes are made by those who keep their properties a long time and with cash flow you can afford to hang on. I also think we are going into another period of high inflation like the 70’s. These things go in cycles plus Bush’s policies practically guarantee high inflation.
Re: Does it matter as long as it cash flows? - Posted by Doug Pretorius
Posted by Doug Pretorius on January 19, 2004 at 17:50:43:
Cashflow investments is my middle name. But we do installment sales instead of rentals, less headaches, more money. However if you can get $300-$500/mo positive on a rental that’s pretty sweet.
Low appreciation areas (especially if houses are moving slowly as well) are ideal for sub2 deals from what I can tell (I buy conventionally with partners.)
Re: Does it matter as long as it cash flows? - Posted by Gunn(Ga)
Posted by Gunn(Ga) on January 19, 2004 at 19:53:27:
Are you rehabbing then selling with owner financing?
I had an investor looking at my latest rehab, he wanted to pay cash and then resale with owner financing. He said he does not rehab, only buys pretty houses with cash then sells on a note.
Gunn(Ga)
Re: Does it matter as long as it cash flows? - Posted by James b
Posted by James b on January 19, 2004 at 18:25:19:
What are installment sales??
Re: Does it matter as long as it cash flows? - Posted by Doug Pretorius
Posted by Doug Pretorius on January 19, 2004 at 21:37:09:
I know exactly where that investor is coming from. The closest thing we do to rehabbing is new paint and carpet, and I try to avoid those as best I can. Rehabbing just isn’t my thing, it’s too much like work 
Installment sale? - Posted by Doug Pretorius
Posted by Doug Pretorius on January 19, 2004 at 18:35:26:
Think about it: “installment” … “sale”.
It’s a way to structure owner financing. And make a ton of money I might add.
Hooray for our side. - NTXT - Posted by Brent_IL
Posted by Brent_IL on January 19, 2004 at 23:34:24:
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Re: Hooray for our side. - NTXT - Posted by lil-pa
Posted by lil-pa on January 20, 2004 at 05:49:35:
Brent,
Since you sell on installment, how does the irs view these transactions, are you a dealer, therefore being taxed the year you sell?
thanks
lillian