Flipping Explained- How Taxes Affect Your Flip #flipping #houseflipping #realestateflipping

I explain the costs, tax deductions and how taxes affect the profitability of a real estate flip. I fully explain each cost and have the supporting references for the averages used below. Purchase= $150k Appraisal = $400 Inspection $400 Closing Costs @ 3.5% = $5,250 Insurance for 1 year = $1,000 Total Purchase Price = $157,050 Monthly Carry Costs Mortgage @ 5% = $644 (Approx $145 toward principal) Utilities = $150 Property Tax = $125 Total Carry = $919 Profit Sale Price = $250,000 Carry = $919 x 5 months = $4,595 Staging = $1,500 Commission @ 5% = $12,500 Closing Costs @ 3% = $7,500 Prepaid Insurance = $583 (7/12 of $1,000) Total = $224,488 Loan Balance = $120,000 - $725 = $119,275 Down Payment + Improvements = $50,000 Total Profit = $55,213 Deductions Miles Driven @ $0.575/mile = $58 Home Office/Office Supplies = $100 Accountant = $500 LLC = $1,000 After Deductions or the profit you are taxed on = $53,555 Federal Tax @ 22% = $11,782 Self Employment Tax @ 15.3% = $8,194 State Tax @ 3% = $1,607 Total After Tax Profit = $31,972 I am not an Accountant, so please verify all tax deductions and tax rates with an actual accountant. Buyer Closing Costs - https://www.zillow.com/mortgage-learning/closing-costs/#:~:text=Typically%2C%20home%20buyers%20will%20pay,according%20to%20a%20recent%20survey. Seller Closing Costs - https://www.zillow.com/sellers-guide/closing-costs-for-sellers/ Tenant Cloud Property Management Landlords, I highly recommend TenantCloud for your property management needs. It has a great application process with credit/background checks, lease management, maintenance requests and more. Use this link for a free account (not a trial account) and see for yourself - https://home.tenantcloud.com/signup?affiliate=86lvlz9kb2rfyn4n Kenton Realty Group - https://kentonrg.tenantcloud.com/ Contact Kenton Knows Email: Kentonknows@gmail.com Facebook Group: https://www.facebook.com/groups/kentonknows Twitter: https://twitter.com/KentonKnows Instagram: https://www.instagram.com/kentonknows/ Reddit: https://www.reddit.com/user/KentonKnows Medium: https://medium.com/@kentonknows DISCLAIMER I am Not a CPA, Attorney, Insurance Agent, Contractor, Lender or a Financial Advisor. None of the information in these videos shall not be construed as tax, legal, insurance, financial, engineering, construction or any other advice of any kind. This Youtube video is for entertainment purposes ONLY. If you need any professional advice, please contact a professional in the that specific subject matter. Linked items may create a financial benefit for Kenton Realty Group, LLC. Kenton Realty Group, LLC is a licensed real estate brokerage in Illinois License 481.010945. This is not an advertisement of property for sale and any mention of any real estate shall not be construed as anything other than an opinion for entertainment purposes only. Real Estate Flipping, How Taxes affect a real estate flip, Understanding a real estate flip, profitability of a real estate flip, how to flip, flip real estate, flipping for a profit, how to profit from flipping, is flipping profitable, real estate investing, real estate investors, real estate flipping taxes, taxes on flipping houses, taxes on flipping property, real estate flipping for beginners, real estate flipping explained, flipping houses 101, beginner house flipping, costs of flipping a house, costs of flipping real estate, real estate flipping costs, real estate transaction costs, real estate flipping for beginners, house flipping taxes, Property investors, making money in real estate