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9 Affordable Strategies to Find, Buy, and Sell Real Estate

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  • 9 Affordable Strategies to Find, Buy, and Sell Real Estate

    Buying and selling real estate can take a great deal of time and money. And since time is possibly the most valuable commodity of them all, real estate expert, Rick Tobin, has compiled a list of some affordable strategies to find (and sell) properties.

    Here are 9 affordable strategies to find highly motivated sellers and great real estate deals...

    I hope you enjoy!
    Buying and selling real estate can take a great deal of time and money. Here are 9 affordable strategies to find highly motivated sellers and great real estate deals...

  • #2
    Thank you Jeanne. this post is very informative for me.

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    • #3
      Thanks for the interesting tips. Wondering about the own blogs you mentioned? Do you recommend to create own blog website or rather contribute to some bigger real estate site or forum? Personal blogs seem a bit too spammy to me sometimes.

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      • #4
        Hi Carly, I think Rick is saying create your own personal Blog. The ones that seem "spammy" are the ones that host a bunch of crappy ads and affiliate links - in hopes of enough clicks to make it worth it. The page takes so long just to load all the garbage.

        Create something of value on a decent platform (like WordPress).

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        • #5
          We own two investment properties, a 4plex that we own and rent, and a business property that houses two of our small businesses under an LLC (13K outstanding on 100K mortgage, likely worth 170-200K). Looking to sell 4plex for 362K,190K outstanding after closing costs (36K), and depreciation $46,100, Net Tax Basis of $82,400, with Longterm Cap Gain of 243,500K, Combined Fed and state taxes will amount to $57,400; after taking 68K to pay off our private house (happy wife...), leaving $10,600 in cash. Found a nice duplex for 260,000K, and thinking of putting 50K down with 1031 exchange. This would mean taxes are now only $8,622 (satisfied with the cash on hand).

          I appreciate all the comments I will get regarding the lack of wisdom, indeed, outright stupidity, of using 68K to pay off our home. That aside, I am curious as to whether I can make the deal on the duplex with the 1031 exchange, then bring it under our business LLC (part of which we used to rent as an apartment until we took over the unit to house one of our businesses). This would protect our home in the event the market goes south. We are just looking to down size, and feel secure. Honestly, at our age we could leave the 57K in taxes and walk, BUT, I JUST CAN'T DO THAT, AS A MATTER OF PRINCIPLE!

          I know I cannot use equity from the business to fund private property, i.e. to buy out my home mortgage, but since the rental would be a business, and since our LLC has a history as a partial rental, is it possible to purchase the duplex with the 1031 exchange (50K) down, and then house it under the LLC?

          Not certain, but also wonder if there is any sense in combining the 50K down, along with the 68K, for a total of 118K down on 1031 exchange, then refi or HELOC for taxes plus the 68K (to purchase our house) and carry back remainder?

          Highly emotional decision. Will honor and appreciate all feedback and suggestions.
          Thanks,
          Dennis

          P.S. Sorry, couldn't figure out how to post as new topic.
          Last edited by Montanatude; 02-15-2017, 10:34 PM.

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          • #6
            Hi Montanatude! such things happen, it's not stupidity or poor judgement, these circumstances as well. hope it will be all figured out for the best

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            • #7
              Thanks Pete

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              • #8
                Montanatude:

                The rules for 1031 exchanges are highly technical, and I won't try to explain it all in a short post. Putting it briefly, it's designed to prevent you from taking out tax free cash, such as in your case, to pay down your home mortgage.

                So the short answer, using the proceeds of the sale, tax free, to pay off your home mortgage is NO.

                The most efficient use of 1031's is to purchase a larger "investment" property with a higher mortgage than what you have, using up all the cash proceeds from the sale. So if you owned the 260K duplex with a 100K mortgage, and 1031 it into the 360K 4-flex, with a 200K mortgage, that would be perfect. The entire gain, as well as the former tax basis of the the relinquished property will now become part and parcel of the up-leg property.

                However, it appears that you are doing the reverse, you're exchanging a larger property into a smaller one, with the excess value, called the boot, becoming taxable. In fact, the idea behind 1031 exchanges is the sellers lay no hands on the cash, thus requiring the use of qualified intermediaries in cases of non-simultaneous exchanges or reverse exchanges. Once you touch the cash, or any portion, it becomes taxable, so does any resulting mortgage reduction.

                Now, you can exchange one property into several, so if you pickup others, beyond the duplex, that's also workable, but you have a limited time identification period to do so.

                My wife worked as a commercial loan officer for a while, she tells me husbands and wives who own their own homes has the business under the husbands name, the house entirely under the wife's name to keep it separate, and the home safe.

                One workable plan is to 1031 the 4-plex into the 2-plex plus a SFH which you'll rent out for at least 2 years, making sure you don't take out any cash and the total mortgages are larger.. Then you can sell the SFH which you're currently living in, tax free for most people, then move into the SFH rental that you acquired under 1031. This appears to satisfy most IRS objections as to holding period and intentions, which is reason behind the 2 year holding period.

                BTW, there is a "New Post" button further up if you want to start a new topic.
                Last edited by Frank Chin; Today, 09:21 AM.

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