First buy and hold purchased from family

Dallas, TX · Member since 2019 · 5 posts · 3 votes

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $60,000
Cash invested: $60,000

My First Rental property came when my father in law needed to sell a house to pay for a wedding. I asked if he would want to sell half instead of the whole thing and he gave me a great deal! I bought out the other half a few years later and am currently contracted to sell it to the tenants for 150k. I am performing my first 1031 Exchange with this one and hope to split the proceeds between 3 new rentals, or 1 small (2-4)multifamily.

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Dylan H.
Rental Property Investor · Savannah, GA · Member since 2018 · 174 posts · 129 votes
6y
Awesome, congrats @Jason Castro!
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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
6y
Awesome growth strategy @Jason Castro. One thing to keep in mind is in a 1031 exchange is that you not only can diversify from one into several replacements like you're doing. You can also allocate your proceeds in any way you want. So you can split it evenly up into a bunch of down payments. Or you can choose to purchase one or more with little leverage and one or more with maximum leverage.
You could for instance purchase one property free and clear for $80K, use $20K as a down payment on a $100K rental, and use the last $50K as a down payment on a small multi. With minimal leverage on one you've recession proofed part of your portfolio. By leveraging the remainder you get the added ROE and arbitrage on interest.
Treat it like one big jig saw puzzle - that pays you to put it together!!
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Jason Castro
OP
Dallas, TX · Member since 2019 · 5 posts · 3 votes
6y
@Dave Foster that’s great advice!
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