Some gurus will tell you to let the trade people buy the materials for themselves. There apparently have been some issues in their experiences that have supposedly clouded the issue of whether these people are employees or contractors. Apparently, this issue went deeper than material acquisition.

For Example:

If you tell someone that they must be on the job from 9 to 5 and you will be paying them an hourly wage, they will be viewed as an employee. The material purchases will be irrelevant. However, if you buy the construction materials and the trade people set their own time of when they come and go, and charge by the job, they should be viewed as contractors. My experience as a flipper and accountant tells me that whoever bought the materials is irrelevant to determining whether someone is a contractor or an employee.

Knowing whether a worker is an employee, or a contractor is relevant from a tax perspective. If the person is an employee, you have social security taxes and Medicare taxes that must be withheld and paid. You also must withhold income taxes. You really don’t want to have to deal with that situation if you can avoid it. At year end you must provide a form W-2 as well.

On the other hand, a contractor is on his own for paying the appropriate taxe
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There are a few things that hinder people when getting into flipping houses. One is the fear of the unknown. This is true of almost any activity that is new to us as humans.

However, the difference here, is that fear is also enhanced by the thought of risking and losing money. Worrying about that risk involved may always be there, but when it is something being done for the first time it becomes magnified. Another obstacle is finding how to fund while still another is finding the houses to flip.

You can attend real estate investment meetings and may also look for training manuals and books. But you cannot start if you lack confidence. There are several ways to obtain houses, but you want to obtain properties that can be flipped for a profit. This means the combination of purchase price along with holding, rehabbing and selling costs must obviously be less than the amount that you can resell the house for.

To begin with, we are looking for houses that are usually in ill-repair. This means you want houses that usually need, at a minimum, upgrading and cosmetic work. Better yet, you want houses that are a wreck. Any house that is obtained for flipping must be acquired at a price that is well below market. We will discuss how to determine whether you will make a profit on a house that you want to obtain
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