We've never bought & sold. First time selling a true rental, in fact, bought just to sell.

We are re-doing the very dated ugly tiny kitchen with new cabinets, adding a dishwasher, new countertop. Easy. We are having it painted. Probably replace some of the flooring.

It's immaculate, inside and out and the yard is lovely. Bathrooms are dated, but at what point are we over-improving?

Congratulations doing your first flip. Have you determined how you plan to sell and pay the "least" amount of Taxes?

Short Term Capital Gains

Long Ter Capital Gains

Exchange

1031 Exchange

Sell and carry back the first mortgage?

We will pay the taxes. No mortgage, cash deal. Plan is to flip it within one-two months. So no depreciation recapture, etc.

It's in immaculate but very dated condition. The recently deceased owners were in their 90's and he took CARE of the place. So we are going to put lipstick on it and just sell it for whatever we can make.

Do it in your Roth IRA. This avoids taxes/cap gains.

If son, etc involved, get them to use their Roth Ira money too for the same reasons.

Our ROTH IRAs are invested, not cash.

Our traditional IRAs are cash, but taking it out triggers the tax (no penalty, but still the tax) so no gain there.

W,

In MY area ANYTHING in ANY CONDITION will sell at full price plus. Buyer's are snatching up ANYTHING. Realtors are calling it PANIC BUYING.

Check a realtor's report for number of listings. As you have stated earlier, very few if any homes listed, putting YOU in the driver's seat.

That driver's seat also means we don't have make the home perfect as we did in a normal market.

When my son sold his home in Denver's hot market a few years ago he planned to replace all the old windows for a better sale. His realtor advised against it and sure enough the home sold BEFORE it hit the market.

Do not delay. I use the phrase "Can't steal in slow motion". The same concept applies to selling in this white hot market.

I am also concerned the market will turn/correct as fast as it turned crazy. Maybe I'm wrong but we KNOW how it wil sell RIGHT NOW. Delays and waiting are a gamble.

Just one news article or announcement from Washington could end this extreme seller's market.

(That happened 13 years ago when a certain political party promoted their candidate by "announcing" we were in a recession - the banks, buyers, and factories froze overnight. The investor loan I had in progress was halted by the bank. In 24 hours my phone stopped ringing.)

ONLINE is the new curb appeal. Jazz up the front and kitchen and get GREAT photos for your online listing.

Learn the new selling methods. These are happening in my area right now. The selling world has shifted.

All those crazy things the realtors have added over the past years are GONE!

-Taking bids until 9pm Friday

-All bids will be reviewed. (they used to say we had to accept or reject each offer as it arrived even if a better offer was waiting)

-AS IS

-I provide an inspection report because we're not waiting for a buyer's inspection and re-negotiating. My guy does them at a discount.

-No home warranty. Buy your own if you want one.

-Escalation clause. "Buyer will increase his bid to $XXXXXX should other bids come in higher.

-Buyer agrees to pay the amount over the bank's appraisal.

-Seller not contributing to closing costs.

-All cash.

-Realtors will "assist" your sale for a small fee rather than the full listing at 6-7%.

(I list them on Zillow and state "Realtors welcome at 3%. They trip over themselves to make ANY money because they cannot get other sales.)

Know your target market. Retired couple? Vacation home? Airbnb investor? First time home buyer?

BRAD

I love doing these in a Roth account.

Since you manage enough units give yourself a small paycheck for the management of the place. Make the amount a small one as you will have to pay self employment taxes.......but this allows you to open a Roth 401K.

The full amount of my paycheck goes into the 401 account. You can focus on 18% in income and payroll taxes or you can pay a much higher short term capital gain.

Find out what the other houses for sale on the market have for amenities. If they have new bathrooms, then do bathrooms, if they have new kitchens then do kitchens. If none have a pool, don't waste money installing a pool. You want to match the amenities they have but do them a bit nicer, and maybe add one additional for a wow factor.

Then find out what sales price would put you in the middle of the market and the lowest priced in the market. Use the lower number to judge how much you can put into the house to fix it up. Be sure to add carrying costs and all the costs including purchase price that you've put into it. The rest is your remodel budget less carrying costs to keep it empty while remodeling.

PS

SON 20,000 just took an offer on a flip with no limit on the escalation clause. That offer is designed to beat ANY other offer.

The world of selling/buying has changed!

BRAD

So far, our only costs beyond cash purchase are going to consist of a couple of thousand (and I do mean only a couple!) in the tiny kitchen, a couple for painting (already have quote from great painter) and a few for flooring. Under $10k will make this house a pretty little house. Yard is already beautiful with flowering bushes, nice shed, fenced. Carport and covered entry.

DH has been under the house and said it was as spotless as the topside.

At our price point, it could be a first home, a retirement home or a rental depending on investor. All will work in this neighborhood/environment.

If we put $150k as purchase, another $10k (let's go hog-wild and say $15k) we are only at $165K. NOTHING is anywhere close to that price. So we will list $225K and see what happens.

Ray, we are already essentially retired. We have Traditional IRAs that we will have to start the RMDs in the not-too-distant future (was 3, now 5 for DH.) We converted some to ROTH last year as there was some sort of ruling on that in the last president's tax bill, which was good for us apparently.

What could you get for rent on this house?

If this property is on the island, it is priced too low. If you decide to sell, add another 10% - 15% to your list price. You can always lower your price if it does not sell.

It's not on the island, it's mainland. In a town where a lot of locals and people who work on the island live. If it were on the island, the lot would be worth $150k!