All Forum Posts by: Marty Sprong

 Just a heads-up on Depreciation Recapture that many people don't realize - Per IRS Pub 537 on Installment Sales under the section Depreciation Recapture Income, "If you sell property for which you claimed or could have claimed a depreciation deduction, you must report any depreciation recapture income in the year of sale, whether or not an installment payment was received that year."

Best,

Marty

I'm sure you'll find a private/hard money lender that would use your current properties as collateral assuming there is enough equity being in 2nd position, as well as the properties you want to acquire. It's all about the numbers. Do you know of any RE allies that you could JV with or entice a private lender by doing a participation loan, where they charge you a reduced interest rate, but get a piece of the profit?

What do the numbers look like? 

Marty

I've heard of Sense Financial, but the people that are in my network use DirectedIRA (that's who I use for my SDIRAs and SoloK - very happy), Advanta, Equity Trust, or Quest. 

Call me.

A 1031 is one way to do that, but if he's an older person, there are other options/strategies that are available if it turns out he really would rather get out of being a landlord, but likes passive income each month. Let's do a zoom and talk about them. I'll DM you or reach out to me. I don't think it allows me to give you my contact.

Is he still in the home? Do you want to start working on it now?

LOL - I just noticed this post was from 6 years ago! :) Oops. How did everything turnout? 

You have some good advice here. I agree with getting everything legally documented and getting your aunt's to agree to getting paid AFTER the house is sold. You could foot the bill on the rehab (charge a 10% "lending/handling" fee) and split the profits after getting your rehab funds/costs back.

First of all, is your grandfather still alive? You want to think about the tax consequences of him selling the home prior to passing away. If he is alive, he should want to wait until he passes away to get the step up in basis for tax purposes unless that dollar amount is not material. Personally, I would want to get control of the house so you can work on it now. You get control by renting it with an option to buy it in the future. Future being at least until grandfather passes way (again assuming you want to save the estate on taxes). Once the beneficiary inherits the house, with new step up in basis, you can apply the option payment (if there was one) to the purchase price and maybe even the rent payments or fraction thereof to the down payment of the home. Let's say the benificiary needs a little more money as down payment, get that to them and have them seller carry the loan. Hopefully the beneficiary would rather you pay them interest vs paying the bank. You can offer the same rate or even more if it saves you loan costs and hassles. Beneficiary will enjoy the passive income. If you can't get the HELOC for whatever reason, you can find private money for the rehab.

Hi James, 

There are quite a few ways to find note buyers, but the easiest way is to list them on Paperstac.com, for example. As mentioned above, you should expect to sell them at a discount, so the investor can get the return they are looking to get. I would expect to see investors like myself to get at LEAST a 10% IRR. Keep in mind you may not want to sell the whole note. You may be interested in selling a partial, which would be, for example, the next 3 years of payments. After the 3 years are up, you start getting paid again from the borrower. Keep in mind, when you sell your note (full or partial), it's a taxable event. You could hypothecate the note (using your note as collateral) to borrow against it, which will get you cash without having the tax consequences. I too am interested in the notes you have for sale. Feel free to message me and we can talk more about or I can enlighten you about note investing.