1031 $500k. Ideas?? - Posted by LJ

Posted by Patrick S. Lawson on October 01, 2005 at 09:14:25:

I would think about getting out of real estate in LA. You might want to consider a tax defered IRA.

1031 $500k. Ideas?? - Posted by LJ

Posted by LJ on October 01, 2005 at 01:35:42:

I opened escrow on 2 properties I’m selling that was cash flowing about $1500per mo.each. Total sale for both will be $1.1mil. What’s a good strategy for exchanging the funds into a property? Properties in Los Angeles are outrageous, so how can I get positive cash flow that I was relying on? Or buy a property then do a HELOC or cash out refi (which I was quoted would be a higher interest rate because it was a non-owner and wanted no prepayment penalty)? Or do I cancel escrow all together and continue receiving the cash flow and equity from these props?

Hope it makes sense.


Re: 1031 $500k. Ideas?? - Posted by ken in sc

Posted by ken in sc on October 04, 2005 at 07:28:12:

I don’t know your situation, but if you have 1.1 million in property and only get $1500 pos cash flow, then you likely have debt on the property. One idea is to move the debt away from the property prior to sale. The 1031 rules say that the replacement property must have at least as much debt on them as the property you sell. By transerring the debt away from the property you sell prior to the actual sale, you wont have to deal with those rules. You can invest in anything regardless of the debt. Your equity can be put as 100% down on an apartment building or a commercial site and therefore your cash flow should increase. Perhaps speak with a knowledgeable commercial broker in your area about opportunities that way.