Looking for beginer 1031 info
1031s are completely new to me. I've "googled it" and believe I have a basic understanding, but I've missed a few things. Here's a basic example, please let me know how I'm doing and where I've gone wrong.
I've got $20,000 in a ROTH IRA.
I use the $20,000 as a 20% down payment to purchase a property that is $95,000 and $5,000 in closing cost.
Let's assume the Mortgage is $500/month, taxes are $100/month and insurance is $100/month and I rent the house for $1,000/month.
This gives me $300/month in cash flow, where does that money go? Is the person writing a check to my Roth IRA or am I putting that $300/month back into my Roth via a personal check from me?
Let's assume after 2 years I sell this property for $120,000 and owe $90,000 on it. $90,00 would be paid to the mortgage holder and would the other $30,000 be put back into my account tax free since it's within a Roth?
Am I required to continue to keep the money in real estate or can I go back and forth between mutual funds and real estate. My goal would more than likely to have buy and hold SFH with this money so I don't foresee many buys and sell.
Thank you for your help with this. This is a completely new topic to me and I'm sure I'm missing the boat on some level.