All Forum Posts by: John R.
John R. has started 1 posts and replied 6 times.
Post: Seller financing or 1031 exchange land
- New to Real Estate
- Austin, TX
- Posts 6
- Votes 1
Quote from @Dave Foster:
@John R., What matters is the valuation placed on the property when you inherited it by the executor of your father's estate. As everyone's saying it's way north of the assessed value by the County tax collector.
Seller financing using good professionals to set up your note is not incredibly hard. And it would be secured by property you are comfortable with if you ever had to foreclose. Your accountant can advise on taxation if you carry a note.
As @Bill B. noted you'll save realtor commissions as well. A 1031 isn't going to help you get that new property unless the seller is willing to wait until you sell your old property. And the folks living on your property could be difficult to dislodge.
The value amount I referenced from that document for the land is $90,240.00.
Originally I didn't want to sell. But the folks residing on the land have been renting it with the intent of purchasing. I've been advised from a close friend and mentee of my father to seller finance the transaction myself with his help.
On the other hand, I feel that a 1031 exchange may be a better approach for tax purposes and continued investing. I've also been warned against it regarding this situation. I appreciate your input regarding this.
Post: Seller financing or 1031 exchange land
- New to Real Estate
- Austin, TX
- Posts 6
- Votes 1
Ok, that is some great insight. Thanks! Anyone else feel free to chime in too!
Post: Seller financing or 1031 exchange land
- New to Real Estate
- Austin, TX
- Posts 6
- Votes 1
So then, I'm only taxed on the market value gained since inheriting? Would it apply differently if I seller financed the transaction? I learned that the market value according to the CAD is currently at $119,120. In 2021 the market value appeared as $100,050.
Post: Seller financing or 1031 exchange land
- New to Real Estate
- Austin, TX
- Posts 6
- Votes 1
Post: Seller financing or 1031 exchange land
- New to Real Estate
- Austin, TX
- Posts 6
- Votes 1
Quote from @Steve Vaughan:
The difference in value now vs when you inherited it 2 years ago is the gain basically.
It's worth $150k now. What was it worth 2 years ago @John R. ?
You'll probably find the net gain isn't worth the trouble and cost of a 1031.
When I inherited it was assessed at $94,500. Not sure what it would've sold for at that time. Maybe around $120k or so.
Post: Seller financing or 1031 exchange land
- New to Real Estate
- Austin, TX
- Posts 6
- Votes 1
Hello BP,
I inherited a 5 acre plot of land after my father's passing, and the deed transferred to me about 2 years ago. Issue is, there are people living on the land that have built a manufactured home on it and have been there for 20 years. They're very interested in purchasing the land and have made me a reasonable offer($150k) for the area where it's located. My question is, should I- A) Seller finance the sale? or B) Attempt a 1031 exchange? Assuming I've located a like-kind property with decent cash-flow and want to defer cap gains.