All Forum Posts by: Ryan Thomas

@Garrett M.

I don't see where you are coming up with $116,000...

Total closing costs are around $20K.

You are looking at about $80K out of pocket, and that includes your downpayment. The initial deposit in escrow would be credited toward your downpayment. When buying, you are not responsible for the transfer tax. I do not know what that $15,000 subordinate mortgage is.

I would suggest you meet with a few mortgage bankers/brokers and get a few good faiths from them and have them explain all the costs to you.

Yeah, I actually work in an office that we share with a title company, so they ran the estimated transfer tax for me.

Welcome, @Brittney Lynn . I'm also on Long Island (a little further east).

Good luck!

Hi Garrett -

Just so you know, transfer tax is paid by the seller, so if you are purchasing, that is not a cost for you. Also, on $600,000, the transfer tax would be around $10,950 (with $8500 of that being NYC TT). You title insurance seems a little high, the premium would be about $2500.

Where are you getting these numbers?

Hi David - I can help you with that, no problem. Send me a PM.

Thanks.

I'll be ther!

Jack,

Sales price = $700,000

Closing costs = $45,000 (estimated)

Debt payoff = $300,000

Net proceeds (cash) = $355,000

If you want full tax deferral, simply exchange into a new property with a purchase price of $655,000 ( sales price minus acceptable exchange closing costs ), and spend all of the $355,000 net proceeds (cash).

By buying for $655,000 and spending the $355,000 in cash, you will make up the debt with either another loan or cash from somewhere else.

Hope this helps.

Mike - It looks like your net proceeds would be around $165K (not including closing costs). If you took $50K at the closing and put it in your pocket, that amount would most likely be taxed (I say most likely because I do not know if you have other losses to offset that). Then, you would put $115K into the exchange, and as long as you bought property for $255K (minus the closing costs from you sale) and spent the rest of the net proceeds on new property, you would defer the rest of the cap gains.

You will want to discuss all of this with your legal/tax advisor beforehand though.

Hi Mike - When doing a 1031 exchange, any funds you put in your pocket (or debt relief) may be taxable.

What was the purchase price? Down payment (Cash "boot" you want to take at closing?)

What is the sales price?

What is your gain?

Are you paying off a mortgage? If so, how much?

What are you planning to purchase now?

Pat - Since you are selling the property to your tenant, I would think the buyer/tenent would be flexible with the closing date on the sale. Therefore, if you plan on doing a 1031 exchange, there is a good chance you could have your replacement property(ies) under contract before selling you property. This way, you do not have to deal with the stress of the 45 day identification period, and 180 days to close on your replacement properties.

You could also make your sale contingent on the purchase and close the sale in the morning and the purchase in the afternoon of the same day. Just be sure to have the exchange in place before the sale and purchase occur.