Hello! This is my first post on the site. I am just starting to get my feet wet in the RE investing business. I do come from a banking background so I understand the financial side. My question is this, I am getting ready to sell my primary residence. I should be able to walk away with between $40K - $50K and no debt. My plan is to rent a place until I can find a good deal on a rental to buy. After that, I plan to find a property to purchase for a primary home to live in, fix up and eventually flip. Does this sound like a good idea and if not I'm looking for ideas on the best way to proceed.
Thanks in advance for the input.
Good afternoon Tim,
I would speak to a local lender who is familiar with 1031 exchanges. You can avoid paying capital gains taxes on that property as long as you use the profit of the sale to purchase a more expensive property.
You can go right into that next deal with your earnings as oppose to paying taxes on it and paying rent (aka someone else's mortgage). Of course, finding the next deal is easier said than done. I'm sure you can use BP or other outlets to find a good investor-friendly agent who can help guide you along the way.
Best of luck to you!
I have been in the house I am selling for almost 15 yrs. so capital gains won't apply. Just want to take that cash and purchase a cash flowing rental property and put that money to work.
Being a primary residence, capital gains should not apply in this situation, if I were you I might go with the primary residence/ flip first so that you don't have to take out more expensive short term loans to complete construction, and use what is left after you complete construction and possibly refinance to invest in rentals.
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