FLIPS and Rehabs

Question from Randy:

When I buy a house to rehab and flip,
I enter the expenses of the rehab,
Do I enter it as an repair expense?

I do a close out report and I am showing a Capitalized expense,
I do not know how It got there. Help Please

Randy

ANSWER from Mike

I enter the expenses of the rehab “Improvements”

– NO, NO, NO
– when you buy any property,
everything and anything you do to or on this property…
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