All Forum Posts by: David Wild

I was considering pulling cash out of a few rentals to purchase another rental. I think “amount paid” may be the term I have been looking for.

Yeah that’s the plan.

I understand if it went up in value again and I sold I could use those proceeds in a 1031. But if the basis is 100k and I refi to 200k, then  sold 5 years later for let’s say 200k. I would owe tax on 100k even though that money was reinvested into another property and I wouldn’t actually be pocketing any cash? 

So when people are using this method to acquire more properties they are giving up the tax break of doing a 1031 on any of the additional money borrowed? I assume the thought is to never sell the refinanced properties? I have a few that I was thinking about refinancing to pay cash for another one, but I’m a little hung up on the future taxes and I’m not sure the properties I have are forever keepers.

When doing a cash out refi to buy more properties, how does that affect a future sale of the property that had cash pulled out? I’ve read about it being done to close to each other and I know that’s a no go. But if I do a cash out refi and then sell the property that had cash pulled out, say 2 or 3 years later what happens. If I can prove that I used the funds to buy more property would I have to pay capital gains?

Im looking to paydown the loans to cover my morgatge.  I'm in CA so it would be tough to buy more investment properties that wold make sense with limited funds. We have done well on the 4 we have equity wise. Seems like a good time to pay them off and use our income to invest in more without getting to over extended. We had a tuff time with lending on the last one, I don't think we could put another one together anytime soon keeping everything we have.

Im considering selling my primary residence to pay off 3 rentals. I would be able to rent a house for the amount of rental income I would receive if they were paid for. This would allow us to use all our day job income to completely pay off a 4th rental within 2 years. Then the plan would be to save money for a down payment on a new primary residence  the following 2 years. At that point we would have about 5k in passive income to make our mortgage payment. If the market started to go crazy I would probably  sell the 4th property and buy a primary  residence sooner. Looking for pros and cons. Thank you.

We are in the process of buying a condo and were running into the same issuse when trying to get pre qualified. We didn't meet the DTI. We ended up getting pre-qualified through a private lender that doesn't use DTI or look at your tax returns. No employment or income information is required, No debt to income (DTI) requirements. This is a asset qualifier loan, it sounds like you may have enough assets to qualify? So far they have been great to work with and we are supposed to close on Friday. Obviously you pay for it, but I feel the rate was decent at 4.875 on a 30 year with 25 percent down. They have a 20 percent down option too. Some of the negatives are cost and it comes with a 3 year prepayment penalty, but with rates moving up I don't see refinancing it anytime soon anyway.

2 of our units had tenants that were under market by about $300. We used that as a negotiating tool for the purchase because the landlords really wanted to keep the tenants in there. Figure if they are about $300 under market and you can raise the rent $100 per year.  You're short $3,600 the first year, $2,400 the 2nd year and 1,200 the 3rd year. Try to use that to pay 7k less. With the rent prices going crazy those tenants  are still well under market and I've essentially been paid upfront.

I'm looking to create passive income for my parents over the next 15-20 years and then having it come to me when they pass. I'm thinking about splitting a rental property 50/50 with them. The property wouldn't have a morgatge. The cost is about 120k. I'm looking to have them keep all the income and then leave me the property when they pass. So in theory I would double my money ( without appreciation) while helping my parents at the same time.

I already have 2 rental property's, I'm looking at doing this one with my parents to help them monthly, locking up a 3rd property for my retirement and not getting over leveraged doing it.

I'm just looking for input on any ramifications of doing this, how to hold title or the best way to pass it back.