Working on it… bad news on 1031 - intermediary wants 12 months of rent shown prior…. Can’t make that happen
Now we’re looking at paying CG tax… netting less than planned but still $700 with no ties
plenty to invest - but still have to life somewhere… or maybe rent? $3 million in commercial properties should pay that for me until I can regroup.
If you did not own the house and had $750,000, would you buy the house? There lies your answer.
Thanks for that… sometimes things need reverse engineered.
@Joe Young - you say WE but say you only get $250k capital gains tax free. If you’re married, you would get $500k capital gains tax free.
If I were you, I would cash out refinance my dream home and I would buy some investment properties or stocks or both, and also list my home on Airbnb/VRBO at an insane nightly rent like $1000-1500/night and go find somewhere fun to travel to, every time I get booked. Also remember that we are at a unique time. Limited supply and low interest rates are driving home prices up. My friend bought a foreclosed ocean front property for cash a couple years ago. She paid $400k and it's worth now $700-800k which was what the foreclosed loan was for, and she gets $350-700/night on Airbnb. All of my properties have never been worth more. And I'm going to use those high comps to get a huge cash out refi at 3.25-3.5% 75% LTV fixed 30 year loans as much as possible.
@Natalie Schanne Yes it’s me and my girlfriend of 6 years - guess I should have listened to her and bought that ring! Haha.
Accountant said there still might be time lol
The 440 I owe was from a cash out… could have done more but could only use my w2 income (less than half my self employment income)
If I add her to the house we have another 6 figure income for DTI
could pull out another 3-400 or HELOC for some short term money.
I don’t hate the idea of Airbnb, but there’s a neighborhood “protest” at the moment trying to prevent it.
Didn’t consider just leaving for the weekend it rents though.. hmm
Accountant also mentioned this was maybe the best time to just pay the CG… as it will only go up - as a 1031 only defers.
Sounds like you have some great problems to solve!
As your primary residence you can exclude from taxes 250k for single person and 500k if you are married. It is not the total of your capital gains, but part of it.
But, on the other hand, if you can get a good cash flow you can cash out refinance and is not considered capital gains, therefore not taxed. Even if you do not cash out the whole 70% LTV so to guarantee a positive cash flow you might be pocketing very close to what you would if you sold after taxes and still have money coming in every month. And the best part you will have taken out 100% of your original investment, and infinite return on investment.
If it was me, I would try to make the SVR model work at least for a couple of year until you can do a 1031 exchange.
(I’m not a lawyer or a tax professional, just my 2 cents)
Sounds great being able to pull out another $400K, but don't think ill qualify for $840k loan with my DTI
@Joe Young I’m in a similar situation. Except, I have Multiple paid off properties. I live in trinity, Fl. I would love to talk with you just to brainstorm. Idt it’s cut n dry even though the numbers kinda say that it is.
Hey @Zac Boelkow ! We decided to list. Figured if nothing else we were ok with downsizing.
Small world! I know Ashley from when I lived in Palm Harbor!
@Joe Young indeed small world. She has her re license now. Good job selling. Clear the debt. That’ll be helpful. Downsize and pay cash for the next place 👍 I’m figuring out how to skin my cat. Everything is telling me to sell everything and retire 🤷♂️
HELOC and then AIrBNB in Tampa ... The properties that I personally own and the ones I've helped investors around the Tampa core are doing insanely well. The delta variant and other states potentially locking down coupled with the midtown and water street development will further propel STR travel.
Keller Williams Tampa Central
@Joe Young This is quite a story and dilemma, but it looks like you've decided to list it!
Would you mind if I shared this on BiggerPockets Instagram? Feel free to let me know your IG handle if you'd like me to tag you, too.
@Nikki Frick I don’t mind at all! Insta is @joeyoungthepeopleschamp