All Forum Posts by: Alex Olson

I just sold a house bought in the 80s in South Florida and now have 250k that I need to 1031 exchange into something else in 45 days from August 31st.

I know the markets are tumultuous and ever-changing at this moment in history. So much so that historical data from last year's growth means little for what the market might be in the future. I can't make a big mistake with this money and need to put it into something. I have the flexibility to move wherever in the country to manage the properties anywhere, so distance is no object.

Does anyone have any suggestions on low maintenance options for 250k cash to leverage into a 1mil loan?

I've only ever managed a SFH, but am willing to do what it takes to learn how to manage something with many more tenants (or perhaps self-storage or warehouses?)

Thanks!

I need recommendations on who to talk with about a 1031 exchange in Oklahoma City.

I see three forces complicating things for many buy-and-holders using the 1031 exchange: 

1) COVID is causing many to diversify their holdings to mitigate potential losses. In other words, their need to use the 1031 exchange has increased. 

2) The shortage of listed properties is complicating the 45-day search for another property. They are having to decide between paying capital gains tax by missing the deadline or paying higher for scarce properties. 

3) Biden's proposed tax plan is threatening the highest-earning 1031 exchangers (please don't make this a political debate). The point is, investors are losing trust in their previous way of avoiding taxes.

Feel free to add to my list of forces. This is by no means exhaustive or detailed.

I'm really wondering where everyone's minds are at and how you're coping with these forces...

For those needing to sell properties now, are you struggling to sell them? For your next property, how are you finding ones that make financial sense? Are you paying higher prices for your next property just to meet that 45-day deadline? Are you losing faith in the exchange itself? Have any of you considered Delaware Statutory Trusts? 

Hello BP Community!  I am in need of some advice/knowledge on Capital Gains Taxes pertaining to my personal situation.

My wife and I currently live in CA and are planning to sell our primary residence in the next month. We are also planning to sell one of our investment properties (located in Montana) this month as well.  We do plan to utilize and use a 1031 exchange on the investment property to defer the capital gains on that sale.  However, we have been fortunate to also gain some serious equity in our primary residence in CA and want avoid paying those capital gains. I am here because we haven't lived in our primary residence for 2 years (just short), which i know is one of the requirements for the $500k capital gains allowance for couples.  However, I did find some extenuating circumstances provisions on the IRS website that make it look like i will still be able to get this done.  Wife on unemployment due to covid, etc. So i think that will get us on the track to get the capital gains exception, at least a partial percentage which would cover us as we dont need the full $500k.

Anyway,  my questions and concerns:

1. Can you do a 1031 exchange and also sell your primary residence the same year without capital gains?  Defer them on the 1031 exchange and then completely avoid them on the primary residence sale? I havent been able to pinpoint much clarity around this and didnt know if a 1031 would interfere with the capital gains of selling a primary residence or vice versa.  Simply put--in a perfect world i want to know if i can perform both sales and not have them interfere with each other at all on capital gains.

2. Has anyone else had a similar situation trying to avoid paying capital gains on the profit of a sale of priamry residence not owned/lived in for the required 2 years?  My wife and I, by the time of the sale, will have owned and lived in the property for 17 months. I scoured the IRS website and seems I found an area that i can use to get us qualified for the exception since we dont qualify for the 2 year piece.  My wife went on unemployment as COVID hit her industry hard and hasnt worked for a few months.  I assume the IRS will eventually put some literature out regarding COVID and impacts on capital gains, but odd situation and i want to make sure we can use every piece of intel to make this sale go well and avoid the capital gains. 

Any help/insight would be extremely appreciated!

Thank you all! 

I'm in Los Angeles and want to make the jump investing out of state into an area that has a profitable cash on cash return. How did you guys make your first jump to choose your location? I'm Looking for a quality team of contractors and property managers in a great investable city. 

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $147,000
Cash invested: $3,000

upper/lower duplex with a seperate single family home on the back of the property where I live.

What made you interested in investing in this type of deal?

The best part of this deal is I get paid to live there.

How did you find this deal and how did you negotiate it?

I just happened to drive by this property one day. I was looking to buy a single family home for myself at the time but this peaked my interest. There wasn't much negotiation as I had no idea what I was doing.

How did you finance this deal?

FHA

How did you add value to the deal?

I have done repairs and updating to the property since purchasing it and increased rents from 525 and 575 to 950 and 700.

Lessons learned? Challenges?

I learned that I need to buy more! And to do your research on any tenants your letting stay in a property your purchasing.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $147,000
Cash invested: $3,000

upper/lower duplex with a seperate single family home on the back of the property where I live.

What made you interested in investing in this type of deal?

The best part of this deal is I get paid to live there.

How did you find this deal and how did you negotiate it?

I just happened to drive by this property one day. I was looking to buy a single family home for myself at the time but this peaked my interest. There wasn't much negotiation as I had no idea what I was doing.

How did you finance this deal?

FHA

How did you add value to the deal?

I have done repairs and updating to the property since purchasing it and increased rents from 525 and 575 to 950 and 700.

Lessons learned? Challenges?

I learned that I need to buy more! And to do your research on any tenants your letting stay in a property your purchasing.

Thanks, @Alex Bekeza I really like the sound of "no shortage of deals!"