Rental / Agricultural property investment

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Rental / Agricultural property investment

Katelyn Atcavage RobideauxPro Member
Realtor · Jupiter, FL · Member since 2022 · 44 posts · 19 votes

Hi BP fam!

My husband and I are looking to do a 1031 with an active air bnb rental property being the property of interest. There are two houses on site. We would live in one and rent out the other. The property is on just under 2 acres and we have plans to add another tiny home on site and a chicken coop with garden. 

The long term rental numbers look good on this as well.

The owners are open to a contingent on sale contract.

We are trying to decide what type of loan is going to be best for a situation like this as we know the agricultural side and the rental side of this are both beneficial.

We are appreciate any insight! Thanks!

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Clayton Silva
Lender · CA · Member since 2018 · 637 posts · 393 votes
1y

I would definitely first consult with a 1031 exchange specialist.  It is my understanding that you cannot live in the property for at least 2 years and 1 day to meet the 1031 exchange requirements.  

Secondly, loan program is going to depend on the property itself, your credit, income and other factors. It would take a pretty deep dive into your finances and situation to find a good program for you. Typically you want to exhaust conventional or full doc NQM options first and then move to bank statement or DSCR once DTI is tapped out. There are a million ways to skin the cat and it would be impossible to give an accurate idea of which program is ideally suited for that specific scenario without some more context.

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  • Clayton Silva
    Lender · CA · Member since 2018 · 637 posts · 393 votes
    1y

    I would definitely first consult with a 1031 exchange specialist.  It is my understanding that you cannot live in the property for at least 2 years and 1 day to meet the 1031 exchange requirements.  

    Secondly, loan program is going to depend on the property itself, your credit, income and other factors. It would take a pretty deep dive into your finances and situation to find a good program for you. Typically you want to exhaust conventional or full doc NQM options first and then move to bank statement or DSCR once DTI is tapped out. There are a million ways to skin the cat and it would be impossible to give an accurate idea of which program is ideally suited for that specific scenario without some more context.

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    • Katelyn Atcavage RobideauxPro Member
      OP
      Realtor · Jupiter, FL · Member since 2022 · 44 posts · 19 votes
      1y
      Quote from @Clayton Silva:

      I would definitely first consult with a 1031 exchange specialist.  It is my understanding that you cannot live in the property for at least 2 years and 1 day to meet the 1031 exchange requirements.  

      Secondly, loan program is going to depend on the property itself, your credit, income and other factors. It would take a pretty deep dive into your finances and situation to find a good program for you. Typically you want to exhaust conventional or full doc NQM options first and then move to bank statement or DSCR once DTI is tapped out. There are a million ways to skin the cat and it would be impossible to give an accurate idea of which program is ideally suited for that specific scenario without some more context.


      Thanks Clayton! I hear you. It’s a pretty broad question for sure. Thanks for your input. Going to dig further. Also shot you a message to connect. 

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  • Dave FosterBusiness Member
    Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
    1y

    @Katelyn Atcavage Robideaux, Your 1031 success will hinge on the valuations.  In essence what you are buying is two properties - one is your primary residence.  The other is an investment property (even though the deed might be the same and it might part of one purchase).  Your accountant will separate out those two pieces of real estate for different treatment on your tax return.

    Since a 1031 exchange can only be used for the sale and purchase of investment real estate you need to make sure that the investment portion (the air bnb, land, and the area for the tiny home) is at least as much as the net sale of your investment property that starts the 1031.

    We call this a mixed or split use property.  And it's no different than purchasing a duplex that you will live in one side of.  As long as the side used for investment is equal to or greater than the net sale of your old property, you'll defer all tax.

    It sounds lovely!

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  • Jake YuskaitisBusiness Member
    Lender · New Jersey, USA · Member since 2022 · 254 posts · 67 votes
    1y

    if you're going to live in one then you can't go no doc.

    [email protected]551-287-6884
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