Resale or 1031?...

[Brandon Sturgill]

Currently contemplating resale or 1031 for a SFH. I bought the property as an investment to rehab and resale, given my kids were still in a private school. Since purchasing the property, we have concluded we will be here 2 more years...which allows me to meet the minimum 1031 occupancy requirements. Truly unsure how I benefit from the 1031...thanks in advance for the education.

Resale figures

• Purchase price 77,000
• Entrance fees (3.5%FHA/ lender fees, EMD, etc.) 4,000
• Rehab costs 12,000
• Exit costs (6% realtor fees/closing costs) 9800
• ARV 130,000

ARV-Purchase-Rehab-Exit= 27,200 (pre-tax)

1031 figures

• The house is virtually maintenance free and needs no repairs...utilities to be paid by tenant.
• Rent 1,000/mo.
• Maintenance 50/mo.
• Vacancy? (plan on 2yr lease with option to renew for 1yr--home then meets the 5yr owner period for 1031)
• Resale price at yr.5 135,000
• Mortgage balance? 65,000
• Exit costs 0...plan on having realtor license by then

At the end of both scenarios the profit will be rolled into another REI...