Looking for advise- 1031 or DSCR-refi/cashout and purchase?

Question

I have an investment property (MA) with a good amount of equity, here's the math:

$385 Purchase Price - Value $570 - I want to flip it to a multi in Philly. I just recently got laid off, but with 790 credit score, hence, my options are somewhat limited.

Also, anyone know of any DSCR lenders that can help?

Your feedback will be great as this is my first flip. Thank you!

Dave Foster · Answer

@Arabella Palma, In order to qualify for a 1031 exchange you must have purchased that property with the intent of holding for productive use. A pure fix and flip will not qualify for the 1031. That might change your reinvestment parameters

Chris Pelc · Answer

I have some connections for great DSCR lenders in the Philly area. The one i currently do a lot of loans with lend on 1.1% of the debt service.

Considering your current employment situation, DSCR is definitely the way to go in addition to the idea of utilizing a 1031 exchange on the property in MA.

How are you planning on sourcing the property? Have you put any thought into off market properties in the Philly area? If you are not afraid of conversions, you could potentially even venture into RM1 conversions - single family home zoned RM1 - converted into a multi family residence.

Give me a call if you'd like to connect!

Jason Wray · Answer

Thats an easy fix DSCR all the way we do not look at income or employment. 1031 allows you to move the funds into the next property tax free. Simple paper work during processing takes care of that part. Great thing about a 1031 exchange is you can put a higher down payment or all of the funds into the new property and take cash out as early as 6 months with DSCR on a cash out refinance.

Looking for advise- 1031 or DSCR-refi/cashout and purchase?

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