I am in possession of a coop in NYC suburbs. Unlike most coop owners, after I moved, I have had no problem keeping it rented. Due to size of mortgage (currently ~$50k) refi to cash out and expand my portfolio is not an option. Coops also normally carry a mortgage rate premium (~1% above other conventional loans).
So, right now the mortgage is paying for itself, and cash flowing for me. And the current tenant signed a lease through 2020 and her job literally relocated across the street. One thought is sinply to hold it. Mortgage should be paid off within nine years.
I believe I could be doing so much more with this property and was wondering if folks had thoughts and whether people know if coops were eligible for 1031 benefit.
All thoughts and insights are most welcome. I feel like I could sell this asset and use the equity for two or three other properties.
The IRS has consistently ruled in favor of NYC coops for 1031 exchanges.
Thanks so much!
You are able to 1031 an interest in a co-op that is an investment property for another co-op or ownership in an actual piece of real estate.
@David Epstein That makes it 3 for 3. 1031 away and get the portfolio rolling.
Updated 10 months ago
Thanks @Christopher Phillips, @Dave Foster, and @Basit Saddiqi!
There are lenders that will do Helocs on co-ops... might be more difficult since it's not owner occupied. But perhaps another way to use your equity for other investment opportunities.
Jason, Thanks much for that insight. I have considered the HELOC option, but not explored it fully. thanks for putting it back on my radar.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing