Why do the flippers always try to flip within 14-21 days on the show? What is the advantage and how do they avoid capital gains tax?

Finishing the job before the first mortgage payment is due is crucial- especially when you consider that it takes 30 days to close. That means more profit, period. Capital gains applies a little differently to investment properties as they are never owner occupied, (especially when it's flipped by an LLC) so they tend to be financed slightly differently as well. A mortgage broker can go over specifics with you and should clear up all of the details if you are considering flipping- it's not extremely different from purchasing an owner occupied property, but you need to be fully informed to ensure things go smoothly.

1st thing is that the 10 day renovations where the guy is kicking the dog if work isn't getting completed in his desired time frame is just plain silly. Mostly made for Television drama.

I've been flipping homes for close to 18 years in Southern California. Of course it's great if you have a flip you can do just minor TLC cosmetic stuff and get sold in 30 days or less to avoid making more than 1 mortgage payment. Most of the time you should have a budget that accomodates a safe amount of time to complete the work and also a nice buffer for marketing the property. It's a pretty weak flip if you have to do it in a month to make a significant profit but you see these people sweating the next mortgage payement when they are making over $100K on the flip which makes little sense.

The best flippers know that they make there money on the purchase and enhance there profit with good choice for cosmetics,renovations as well as marketing allowances.

Most of the Made for Television drama of having to have a renovation completed in 30 days, 20 days, or even less is just that. Most people have caught on to that but still like watching the shows just like a Jerry Springer show. You know what is going to happen but you watch anyway. In many cities getting permits will take weeks or longer so you can't do a 20 day project.

In some cases people really are budgeted pretty close to the vest and they really do need to avoid having to come up with more than 2 or 3 mortgage payments but that is a roll of the dice depending on how the market will accomodate what they are doing.

Keep in mind that the last 4 years in particular that most of these shows are based upon thre has been a huge upswing in many real estate marktets that can help cover up some flippers mistakes. Right now we are starting to see and downswing that most likely will result in a falling market for the next 3 or 4 years but that is another story. Just be careful if you are going to try to flip as financing is tightening up and there will be many less buyers than before.

Keep in mind residential real esate financing is not done in the name of an LLC other than with very few exceptions that most nobody that flips homes qualifys for. Finacing and property title are in the name of individuals that do not enjoy LLC protections even if they deed the property into the LLC.

Best thing is to consult a C.P.A. and and attorney in your area.