Do I need a license ? Am I a dealer ?’

After all those ‘flip this house’, ‘fixer upper’, ‘house hunters’ TV shows, you might wantAnibal-Affiliates-RealtyNetWorth-AllOverUSA-DC-night to consider if you’re a ‘dealer’. Why ?

The state licensing board may classify you as being a professional and in need of a license and continuing education. At the same time, the IRS may want to treat your income differently if this is a ‘full time job’, what ever that is. And just what is it? This is a sit down style appointment, but I will give you some quick things to consider:

Having completed 1000’s of 1040’s, and many 1120/ 1065 and 1120S returns let me expand a bit. If you are an unlicensed individual, buy/sell in your name/ and make 100% of your living from the profits of real estate transactions year after year, IRS and Dept of Licensing will both want to classify you as a dealer. Now consider clients I have where I set up an entity for them, the entity owns the properties, a real estate broker handles the buy/sell brokerage, and the person takes a ‘reasonable’ salary & gets a W2 for management/ labor. Is the individual a dealer ?

What about folks that I buy/ sell/ lease/ resell/ subdivide using a broker and they do little other than come to closings ? Dealers ? What if its 100% of their income ? or 49% ? or 10% of their AGI ?

I’ve walked thru these audits and seen the IRS argue a position. I’ve also argued my position w/ IRS agents teaching at MSU Tax School and they’ve taken the opposite position as the auditor was taking. Sooo, there are licensing and taxation issues.

The IRS is far less forgiving then it once was. Here’s my default answer: “For any business decision speak w/ your CPA, lawyer, insurance agent, and banker. Each will have different points to ponder and words of wisdom.

Bottom line.anibal-affiliates-realtynetworth_deeding-property-to-children-b

  • The when/ how to transfer should involve your accountant, lawyer, insurance agent, banker/lender at a minimum.

As I’ve told clients for decades: “You’re not dealing with a candy bar.”


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So what can you expect with a managed investment rental ?

Take a look at this 24/7 client accessible spreadsheet showing up to date return on open247investment (ROI), rent and cash flow, and related activity file.

Flushing MI house for rent Available 6/1

Available 6/1.
Freshly updated 2 bdrm/ 2 ceramic baths/ 2 car garage, huge rear deck, fenced rear yard with shed and garden space, includes frig/ stove/ dishwasher/ & laundry room appliances, a/c, lighted closets, bsmt laundry.

$925 includes lawn and snow plowing service, $875 without.

Flushing MI house for rent RealtyNetWorth.com

Wallpaper Removal

Lots of YouTube videos about this. They mostly come down to:

  1. Peel off the top layer of paper
  2. You are left w/ a yellow part still glued on
  3. Soak it using a spray bottle from kitchen or yard tools – solution might be:
    1. Hot water
    2. Water & vinegar 50/50
    3. Water with fabric softener ( or hair conditioner )
  4. Wait a couple minutes
  5. Use a wide drywall mud knife to peel off – often it comes off easily by just pulling
  6. Then wipe down the wall with a sponge and water

You’ll be shocked how easy it is !

 

LIABILITY & PITFALLS TO AVOID – There are certain things you can do to limit your liability when renting your property.

Are you up to date on the law? See the Landlord Tenant Act.

Make sure that there is no debris in or around the unit.

Be aware of mold issues and the law regarding it.

Ensure that there are no missing broken or loose walkways, steps, railings, doors or flooring.

Ensure that all utilities are in good working order.

It is vital that all doors, locks and windows open and close properly for ingress/egress, and for security.

Make sure all rooms have a smoke detector in good working condition with 5 year batteries.

The law on Lead Based Paint on units built prior to 1978. Please make sure that there is NO loose, chipped or flaking paint due to possible lead based paint causing illness. We have a booklet on this free of charge.

All appliances supplied by owner must be in good working order.

All property owners should carry basic “liability” insurance on a rental & have tenant carry renter policy with owner/managers listed as additional insured.

For my Ann Arbor investors

Ann Arbor: It is illegal for the landlord to include a cleaning waiver as part of the lease without compensation to the tenant.
Ann Arbor City Housing Code prohibits cleaning waivers; however, it does not prohibit agreements between landlord and tenant that provide for the tenant to clean the unit in return for compensation. –

Ann Arbor Landlords / Investing

Landlords of Ann Arbor city limits have significant additional duties over federal and state statues. You may wish to visit this site: