Flipping houses is a business fraught with risks and is not actually investing in real estate, it is pure speculation.  Although they make it look somewhat easy on the multitude of TV shows, it really isn’t.  That is why HGTV are changing the formats of a number of these shows because the risks have recently really started to take their toll on the people in the shows.

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Generally speaking, you need to incorporate if you are running an active business and making at least $30,000 per year. A corporation allows you the flexibility to defer income, manage your personal tax brackets and limit legal liability where there are no personal guarantees.

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Many property investors are able to increase monthly cash-flow from a property by adding an additional suite (such as in the basement). Given the significant increase in property values, sometimes the additional suite is the only way to obtain positive cash-flow. Interestingly, many property investors develop these suites AFTER the property is acquired – and, although the investor is always worried the suite will be shut down by the municipality, the investor fails to address an equally important issue – insurance.

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Whoever said it takes money to make money was someone trying to justify why they’re broke. It does not take money to make money, and I’ll prove it. I’ll give you a step by step plan to buy and sell a house, even if you’re absolutely broke, have a negative net worth, no job, no friends, no credit and just got pardoned from the state prison. The truth is, if you can’t make money without money, you can’t make money with money!

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The vendor can only defer a portion of the Capital Gains taxes if he takes a vendor take back mortgage. How does this work? Well, you can elect to defer the taxes on the ratio of the portion monies collected to the total capital gains over a maximum of 5 years with 20% of the profit in each year.

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