All Forum Posts by: Wally Katz

Have a couple of loans and I cannot for the life of me figure out what makes the most sense in terms of trying to wipe them out or just invest the money and ride them out.

1 mortgage @ 215k, 4.2%, 30yr term, 30 yr amort. (primary residence) monthly pmt ~1700

1 mortgage @115k 5%, 10 yr term, 25 yr amort (business) (monthly pmt ~700) - 5,4,3,2,1 prepay

Biz loan @275k, 4.5%, 10yr term, 10 yr amort. (monthly pmt ~3000) 5,4,3,2,1 prepay

Second year in business. First year net was $200k. On track this year to do $300k net. My gut thought was to wipe out the 10 yr term mortgage even with the 4% prepay penalty as I am basically only paying interest to hold it and will still have to pay $80k at the end of the loan term anyway. Then maybe try to bump the other 2 loans by $1000 each monthly in terms of payment so they get paid down sooner. And then invest whatever is left after taxes and life expenses. Or do I just ride those out at the current interest rates and invest all proceeds after taxes / expenses? Or should I be dumping everything into investments and just hold the loans as they are all 5% and below? When I calculate how much interest I would pay over the life of everything I feel like I am just throwing money away for nothing..

@Bill Exeter. Silent partner is not connected to the LLC other than receiving annual distributions on the owned properties. Their name is not anywhere on LLC docs or any deeds or titles, however the property address's do get listed in their tax returns for depreciation, etc. The silent partner is not a member of the LLC. The properties are owned entirely in cash by partner. There is a distribution split based on the development of them. Trying to exit the deals and minimize tax impact without investing into more real estate deals at this moment in time..

right but what if the primary residence is bought as an 'investment.' :)

Have a semi complicated scenario I can't quite find the answer to. Managing member of an LLC that owns investment property (with a silent partner's equity). Would it be possible for the LLC to sell the investment properties and then 1031 exchange the proceeds into the silent partners primary residence (they do not have a mortgage on their primary res)? I understand the title would change and legalese blah blah, but eventually the silent partner could just be basically given (eventual) control of the LLC no?