I will be blogging in the next few months a strategy and important tips about how to flip a house. It won't be advice like the house flipping shows that you see on tv but the real way to flip a house. Many people think they can flip a house but in reality, they are better off putting their money into an RRSP for their child's future because if you're married and have kids and want to flip a house...the divorce may cost you more at the end of the day!!
So the first step to flipping a house is get all the facts...ALL the facts. Did I say ALL the facts...I think I did!
AND THEN CALL ME - 613-921-6036
If you are in Ontario, I can structure the purchase for you and mentor you through the process of flipping a house.
So here we go on the Magical Mystery Tour (I love the Beatles) of Flipping Houses.
Fact 1 - if you own your own home then any property you buy after that is subject to Land Transfer Tax. This is the cash grab the government gets everytime there is a sale of a property. There is a formula to calculate the tax and it is always on the purchase price. First time home owners are excempt from this tax which is nice of the government but keep in mind that people on average usually move every 5 years, the government will get their money sooner or later!!
For example - a $100,000 home purchased subject to LTT (Land Transfer Tax - this is the last time I'm typing this all out btw - by-the-way...txting people will know this) is calculated like this - .005% of the first $55,000 and .01% from $55,000 to $250,000. So for all you mathematicians out there that comes to $275 for the first $55,000 and $450 for the remaining $45,000. ($55,000 + $45,000 = $100,000) get it??
This comes to $725 you have to pay the government.
Here are 2 links that will help you understand this rule:
Bookmark these links because you will use them everytime you purchase a house to flip.
The $100,000 purchase has now cost $100,725 before you even start looking for the property. I will be using this purchase price as a model for the entire process because it's an easy number and I said so!!