All Forum Posts by: Frank M.

You got it, but it's not just that he expenses 'can' come from the IRA, they must. Which means if you bought a house for much over $90K, you'd have to be careful the IRA has enough liquidity to pay expenses and repairs.

It's the full $700K. That much, I'm sure of.

Anything short of that is "boot" and will cause issues (tax due)

First, don't ever estimate what you can know. The town will have records you can often find on line, or stop by. The taxes are a public record.

I found out the hard way, the rate on a rental is different than owner occupied. Your agent should be able to give you a quote, or at least get to within a few percent of the number you'll pay.

I'm too green to advise the rest, but this is a start.

By the way, even utilities, the company might be willing to share the numbers if you need them and ask nicely.

I'd be curious to understand what would happen if one were to inherit a house with a mortgage greater than the value of the house. I'd guess the beneficiary shouldn't take title at all.

The bank will have a lien on that property and the sale will only give the buyer clear title once removed.

If it's just a HELOC for a small portion of the value, the bank has no motive to make a deal on this.

So yes, of course you'll be required to pay it off, I doubt they'll deal. (If the bank somehow failed to record the lien, that would be interesting.)

Have you confirmed that this land is zoned for what you want to do? If not, you might wish to check with town first.

Thanks. I think my second answer corrects this. So to be clear, the OP can swap to get two properties, but cannot pull cash out. I trust once the deal is complete, a refinance can occur at a later time?

If you are a spreadsheet junkie, here's an exercise for you.

Get median income data over the years. Calculate 25% of a month's income.

Get the prevailing 30 year fixed rate mortgage and calculate the amount one can borrow for that monthly payment.

You will find this tightly correlates to median home prices. The bubble was nearly entirely accounted for by the rate drop going into the early '00s. At the median, all was actually well, it was the funky financing that caused the crash, not the fixed 30 year loans even with 10% down.

I don't believe in the hyperinflation scenario. But, it it should occur, when the dust settles, the median home in a given area will track median income as I calculate above.

IRS regs are convoluted enough to make this answer more difficult than it should be.

The Rules of "Boot" in a Section 1031 Exchange implies you can't walk away from the deal with cash. But he prior article I linked confirms the 2 for 1 deal works to cover the value of the first property, and once the exchange is complete, you are welcome to refinance property you own. I'd choose the revisiting the bank a second time over paying tax on money you can continue to defer.

From this Article, I read that what you are doing is perfect. I'll disclaim - I am not a 1031 expert, but my understanding is that the rules are more about the value of what you buy and sell, basically ignoring cash. If that weren't the case, then it would be a SE matter to refinance after the purchase is complete.

My concern wasn't the cash, but the 2 for 1 aspect, which I'd not researched before. Happy to read SE confirmation that I'm understanding all this correctly,or to set me straight if not.