Real estate flipping?

Someone has approached my wife about \"real estate flipping\" in Cabo. I know nothing about this but I think I have an idea what it is. If anyone has heard of this fill me in before I have to meet with this fellow.
Muchas gracias.

Chuck, real estate flipping is buying a property for a short period of time and then selling it for an nice profit. there are dangers to both parties of this kind of transactions. one it depends where the initial funding for the purchaser. where he got his funds (sell of other assets, reat estate property, investments) and then the same questions come back to you on this as well.

we went thru this when we bought our condo at the end of december, we were warned about \"flipping\" our condo etc. but it sounds like a lot of people are doing this and getting rich or richer doing this...

good luck, i hope this has helped you somewhat....

8) Tom aka Mr. Crown

Not sure why the source of your funds matter. But two consideration are

(1) You need to know you market very well. You have to be sure the property is really being offered under market of you wont make any money when you sell. You have to take into consideration all closing costs and capital gains taxes both in mexico and in the states or canada (depending where you reside).

(2) You need to have spare money cause if you dont sell quickly your money will be tied up on the other property.

You can make money doing this - cause there are always distress sales - especially off season. However once again i will warn you that you really need to know your market.

Alot of people buy a lot for their own personal use that is larger than they need. Then they wait 6 months or a year to sell off half the lot to finance their construction. This is really flipping as well and it makes good sense for example north of vallarta where property values are increasing so quickly.

In this case, since you want the land anyway to build on -- worst case scenerio is you end up with a larger lot cause you cant quickly sell off a piece (beware zonning issues as well).

Good luck

jeff

Each state may be different on how long you can hold \"gaines\" from a sale of property until you invest into another property. It has to do with capital gains taxes, property taxes, property tax credits, homestead credits, etc. We were asked a small series of questions on our intentions of our purchase, as this is growing industry in iowa. especially with areas offering tax abatements to build in new sub-divisions.

but this is just our opinion on what we experienced when we were working on and dealing with our new condo. i am by no means an expert in this matter, but if you want, i have at my disposal a real estate attorney that works in Manhattan that really knows this stuff. Rick can guide you thru this better than anybody, especially if you are looking at it as an investment property.

8) Tom aka Mr. Crown

Interesting topic!!

I do not know anything about flipping property in Mexico.

You can flip a home once a year in Canada without having to pay capital gains.
I also think if one stays modest and does not keep increasing the size of their property and mortgage you can do quite well.

Calgary and area is in a boom. There are as of last night 1800 properties on the market. There are 4800 Real Estate agents. Many are having to quit their jobs especially the newbies.
We are self employed and we come from a feast or famine Province if one is in the trades so....... we are flipping in Alberta.
I agree with lyrhin that you need to know your market.
We just signed for our third property. Not to get rich at it but look after our retirement as the kids do not want me living with them. :)
It is taking about 13 months to have a new home built.
Properties in the little city where I live are going up about 3% a month.
When you flip and if you plan to live in the property one is always living it seems on a construction site.
I think it would be hard to flip homes if you had children .
I look at it as a job It not easy packing unpacking settling and then doing it again and going through the process of selling which we try and do ourselves to save huge amount of monies..

I woulds love to flip property in Mexico especially renos to redo but I do not see that happening.
Want to retire and take a little vacation to PV once a year and elsewhere and live happy ever after .:)
Just my flipping thoughts. ;D

The site below has a few interesting articles. One on flipping property#8 and I enjoyed reading about the baby boomers. There will be 70million of them.(us) Yikes! :shock:
(http://www.virtualvallarta.com/cgi-bin/moxiebin/bm_tools.cgi?print=273;s=6_9;site=1)

just a short followup on USA capital gains on mexican property. i wish i could find the article again, but from memory...

you can flip mex property and escape cap gains in the usa as well (doesnt really matter if your primary residence in USA or Mexico to get the excusion.

But HERE IS THE RUB...

The IRS did some sort of ruling (which was being challenged) -- that if you own mex property in a Fidecomiso trust that you DO NOT OWN real estate... that is not REAL PROPERTY so that the gain is treated as long or short term capital gains on investments (like stocks).

As a result they were going to disallow gap gains excusions on mex homes that were primariy residences but also in a trust.

The way around it is to make sure you have your FM3 for 5 yrs - apply for mex citizen ship. USA will not recognize Mex citizenship but MEX will so you wont need a trust. so you own property outright and then would qualify for the cap gains exclusion on a primary residence in mexico.

anyway just some food for thought.