Posted by Rich-CA on May 13, 2007 at 19:26:24:
The thing about a 1031x is that you would have to sell the house - which you said you are reluctant to do. If you do a 1031x and the value of the replacement properties is less than the one you sold, the difference is taxable income. Personally, I would sell in a 1031x, and go to several lower cost properties, spreading the rent. You will find that the rents don’t drop as fast as the property price (more expensive properties typically rent for proportionately less per dollar of purchase price than less expensive properties). By having multiple properties, you make the impact of a vacancy less.
What are my options? - Posted by Teresa
Posted by Teresa on May 13, 2007 at 14:09:04:
Here is my dilemma: I own a house for which I am making minimum payments of 1438.00. I rent it out at the market value for 1090.00. The full interest and principal payment is 2400+ dollars a month. I cannot afford to pay that since I lost my job and found another job that is only part-time and pays very little. I have about 75,000 left in equity on the house. I am afraid to sell because my tenants may bail and I would have to pay the mortgage which I cannot afford; yet, I realize I am losing money fast. I am also thinking of doing a 1031x and put the equity into a smaller modest home. Sorry for such a long posting. Any suggestions, constructive criticism, or comments would be greatly appreciated. Thank you. Teresa
Re: What are my options? - Posted by Anthony Hadzimichalis
Posted by Anthony Hadzimichalis on May 14, 2007 at 19:46:25:
Maybe your tenants would consider a lease option for however long you think it will take you to get back on your feet…ask for up-front option consideration and extra monthly money…explain that the up-front money and extra monthly money will go toward the downpayment when they decide to exercise the option.