All Forum Posts by: Alex Billips

I’m about to close on my second foreclosure and I need some advice on what is the best type of insurance. I plan on doing some quick paint and a few touch ups and then list the house. If it doesn’t not sell within a few months I’ll possibly list it for rent. Thanks in advance.

@Dave Foster

Thanks for the info Dave. From the points you have made I guess I will just move forward with a straight sale of the property to my son. He will be buying the property as his primary residence and is anticipating on staying at least two years. I guess I’ll just pay the short term capital gains on the sale, treat the loaned or invested money as just a capital contribution which I can pull out or use to re invest in another home.

I guess my initial understanding of how I could use the 1031 to grow my investing business was a little construed.

Any suggestions of books I can read the better understand the strategies of using the 1031 to my advantage.

My longer goal is to try to acquire 10 or more rental properties that are paid for preferably single family. Then I can retire from my 9-5 job and just maintain the properties and keep them rented out for cash flow. I also have no issues with flipping homes along the way.

@Christopher Smith

That is correct.

I'll try to keep this as short as possible. I purchased my first real estate investment property in October 2018, under a newly created single owner LLC. My intentions from the start was to purchase outright then rehab the house and rent it out, then eventually take out a refi mortgage to recover my cash investment.

I personally loaned all the funds for the purchase and the rehab to the LLC from my personal saving and noted it with each deposit made over a 5 month period.

Recently my son approached me and asked me if I would could sell him the house because he is now going through a Divorce and needs a home. I agreed to sell him the house and we have a closing date at the end of April 2019.

My question is can I roll only the gain from the sale into a 1031 deferred exchange and pull my loaned money out at the closing?

My attorney is telling me I need to roll all of the money from the sale into the 1031. I am not understanding why he is not looking at my loans to the company the same as if I had borrowed the money from a bank or a hard money lender. I am lien holder.

I don’t understand why I can’t just use a personal loan note at the closing for the amount I loaned to the company and receive the funds back at closing and then roll the gain into a 1031 exchange. All deposits and expenses are documented in the bank statement and check book.

If anyone has personal experience with a situation like this please respond with some advice. Thanks in advance.