Creative Financing Question

[Andy Milby]

I am looking into 3 duplexes and was trying to think of creative ways to do the deal. I’m curious peoples thoughts on structuring a deal this way: Assuming that the numbers are good here is how I’m looking at structuring the deal with the seller: Property 1: $90,000 Property 2: $90,000 Property 3: $1 My reasoning would be to get mortgages on the full value of the 2 houses then be able to refinance property 3 for a similar amount in order to fully leverage the properties. Here are the downsides that my accountant has identified: 1. Capital gains on property would be large - could defer with 1031 exchange in the future 2. Depreciation for property 3 would be non existent- however the depreciation would be offset since the sale prices of the other houses are higher This is my first real post so be kind. If there are other positives/negatives please let me know!

[Andy Milby]

Thanks for the response!

My thought process is if I offer $60k per property they will appraise at $60k per property most likely and I will have to close on 3 mortgages (3 x closing costs).

However, if the offer is $90k for the 2 properties they may appraise at $90k each and only have 2 mortgages.

This is assuming all properties would appraise at $90k. I could end up having 2 properties with a mortgage and 1 property free and clear or I could refinance and get 75% of $90k in cash to reinvest.

Hopefully the thought process makes sense. I’m not sure if it’s the best decision or not, but I’m more looking to validate the thought process and get feedback.