Hey guys have a quick question about selling a refinanced building
*not the exact numbers at all*
Lets say I buy a property for 100k (20% down), put 50k (cash) into it. now Im "150k" in or 70k of my own cash in.
the thing appraises for 400k by my bank and I do a cashout refinance at 75% LTV
so now Ive pulled 220k from the cashout refinance (300-80 I still owe) and I buy some other buildings with that 220k. now I owe 300k on the building and have 100k "equity" in it.
Finally lets say I sell this building for 380k. and basically come out with 80k.
now for tax purposes, did I technically make money or lose money? since I basically bought it for 150k and in the end sold it for 380k does that mean I made 230k?
or does it mean I made a LOSS since it's under the 400k I refinanced it for.
$$230.. Your financing/refinancing has no bearing.....just your cost verses sale price, less closing costs.
You must calculate your gain by subtracting adjusted basis and selling costs from the selling price.
Your selling price is $380,000
Your adjusted basis purchase price(home purchase price + closing costs) + improvements
Selling costs(commissions, some fees at closing)
Selling price - $380,000
Yeah after a quick second of thinking about it myself, I realized it is just price-cost. otherwise everyone would do this hah...thanks all
good problem to have...i'd rather have your deal flow and execution than tax knowledge
start looking into a 1031 exchange if you are going to be selling and buying
In an attempt to get the owner of the building next door to cut his grass, that search has led me to this forum. David Zheng, an investor in the Skinker Debaliviere neighborhood in St. Louis MO. is an absentee landlord that runs derelict boarding houses throughout our lovely neighborhood. Yes he does make good money and has an entrepreneurial spirit that should be commended but someone on this forum needs to teach the value of capital improvements and preventative maintenance. David Zheng is also in violation of several zoning laws regarding occupancy allowances and will be back in the courts of the city of St. Louis very soon. David, if your listening, cut your damn grass and quitting renting rooms in a single family neighborhood to unknowing and innocent college students.