All Forum Posts by: Gary F.

@Tyler Kastelberg Yeah upon rough estimate my cap gains would be about $65-$75k. So the MIS might not be the best route.

@Tyler Kastelberg So if my property sold for 1.1 then I’d pay approximately $60k?

@Tyler Kastelberg Thank you With the MIS how much in fees would I pay? Of course if it’s close to the cap gains then it might not be the best route. With both the 1031 and MIS I’m committed to reinvesting the capital. So maybe the Qualified Opportunity Zone could work. But then I read that 95% (?) of the assets (the sales price of my home, I believe) would have to be in an OZ. I don’t want nearly all of it in one area. With the LO I’d still have to 1031 or MIS to defer gains but at least it gives me some thinking time. I also make some cash flow and have the tax benefits while it’s being leased. And the leasee might not exercise the Option to buy, which is great because I keep the house. I’m really leaning towards the LO. Hearing these opinions and experiences are super helpful. Keep them coming.....

Originally posted by @Tyler Kastelberg:

@Gary F.

I've advised on a few monetized installment sales -- one quick consideration: I haven't found a monetized installment sale dealer who will do a deal that is less than $1 million. If less than $1 million, opportunity zones might be your best option.

Good luck!

 My home would probably sell for $1.1M+.  How would this work? How much would I freely be able to pocket and how much in fees?  I'm trying to weigh my options vs paying the cap gains, vs. 1031 vs. doing a Lease Option.  

@Rodolfo Canon Oh 90%?! Well that probably won’t work for me. Then I’m limited to those identified areas. I want to Invest in different towns and states. Thanks for the excellent information

@Lance Lvovsky That makes sense. It’s so new.

@David Cruice It’s actually effective already I believe as of April. CA has identified OZ too. I guess it’s so new that probably very few have exercised this option

Originally posted by @Christine Kankowski:

I've done it and it can be a win-win for both parties.

Make sure whoever is buying it is serious and ask why they need an option vs buying now. DO you really think they will qualify in the time period? Are you requiring a non-refundable deposit- that goes towards purchase when they buy.  Discuss who makes repairs during option period- typically buyer.

It works if the buyer can legitimately qualify- dont take someones deposit if they think they can qualify in a year... but you know they wont be able to. 

Agree on the price up front, or agree to get 1-2 appraisals for the price at the time of sale. 

You cannot sell to anyone else if buyers are in the option period- so your hands will be tied on that front. 

 Hi, Christine

Thank you for replying. This is very helpful.

Isn't it standard to have a non-refundable deposit, which goes towards the Option sale?  Did you have this in your Lease Options transactions?

If  we get appraisals and the price drops or increases, do they get they pay that new price?  I thought having a final price was the advantage of these ? Because obviously if the price drops, then the seller loses out and buyer favored. But also if the price increased, the buyer still gets the set price.  Or am I misunderstanding something?

Isnt it also standard to have the buyer maintain the property and pay all cost while in the lease? 

I'm thinking of selling my San Jose SFR and looking at options. A Lease with Option to Buy is another method I am considering. It seems here in the Bay Area, it is starting to soften, DOM increasing, some sellers having to accept lower than listing price. But comps in my area show prices overall remain $1.1+

My question is in the current market, would it be advantageous to sell using this method?

I just heard about this alternative to tax deferral.  Anyone done one of these and have experiences to share?