Avoiding Capital Gains Tax Strategy

[Lauren Cooper]

I just sold the house I'm living in for a large profit. Because I lived there for 2 years, I avoided paying capital gains tax on it.

I found another house that needs updating that I want to live in for 2 years then sell like the last one.

I am paying $350k for it. It needs $100k in repairs/updates.

Which of these would you do?

A) Pay $350k cash, do repairs only for $50k cash, then get a mortgage (For around $400-$500k) and do remaining updates over the next 2 years?

B) Pay $350k cash, do all repairs and updates for $100k cash (which is all of your liquid funds), then get a mortgage on the full ARV ($500-$600k)?

C) Pay $350k cash, get a mortgage (for $350k),then do $100k in repairs/updates?

D) Pay $350k cash, get a home equity loan for repairs/updates for $100k?

I would like to use some of my cash for purchasing houses using the BRRRR method, and other investments in the meantime.

[Karen O.]

I'd get the biggest mortgage I'm comfortable with and qualify for.  Top off my emergency fund & pretax opportunities if I have any.

Diversify by putting balance of gain to work elsewhere.