All Forum Posts by: Alex Todd

@Dave Foster thank you! @Wayne Brooks 

I appreciate the breakdown. We could in theory then either use the 2 in 5 when selling our primary to move into the future rental. (Move out, hold as LTR for 2yrs, take $500j tax free) or 1031 it as well. Interesting.

if we’re trying to pull fwd retirement and reduce cost of living, is the only downside to this having to buy a property of equal or greater value AND have same debt service? ( can’t take $1m from 1031 and buy property outright if loan existed on former property) 

We have (2) properties (primary and existing LTR) with heavy appreciation and trying to figure out how to leverage both in the best way to “not mess it up” as we continue in the RE journey 

Hi Folks - wanted to play out a scenario and see if how Im interpreting this is accurate...

- 1031 a rental property and follow rules for new investment (like kind, equal/greater value, price point, etc) 

- Rent for X time (to prove intent) 

- Move into same property and declare as primary residence at +24month mark to fulfill requirement 

Two questions :
- At the time of declaration, do you then pay Cap gains tax on original sale or are they still kicked down the road?
- Equal/ Greater value : Is this equal to sale price of original property OR the amount able to be reinvested off the sale of original prop?

Thanks in advance,

Alex

Hoping the BP community can help - our home as appreciated 500k since 2015 - thanks Silicon Valley :)

Now, we’re moving (still relatively close by) and discussing wether or not to try and keep and rent our current home or sell. Market rents would cover mortgage+Expense by ~$100/month, which based on my analysis would be a good return, knowing market appreciation. 

My question lies in the benefits over the long run...the 2 in 5 tax exemption for capital gains allow us to pay no cap gains Up to 500k but would require us to sell. Or we rent for long term (+25yrs) and pay full amount of cap gains tax when selling anytime after the 3yr Mark, which would be a meaningful tax hit.

If we sell - plan would be to reinvest out of state in a few properties and Put our cap gains tax savings into the market.

I’m not sure which direction the math supports. Any guidance/recommendations/thoughts are welcome!

Thanks 

AT

Total newbie here but have been reading from afar about how to leverage/extract equity from a primary residence using a HELOC and want to validate an approach/idea/though to see if I'm following this properly.

If I was to take a HELOC out to buy a SFR outright(~$100k purchase) and then re-finance after 6mo/1yr to fixed 30yr rate and get an 80% LTV, I would essentially "get back" $80k, pay off principle of HELOC directly, and return the "used" HELOC value to $20k. Is that feasible/accurate? Also, is that the right way to look at leveraging a HELOC when our goal is Buy and Hold, long term strategy?

Note " I'd then combine the HELOC interest only monthly payment with new mortgage to get a total monthly cost when doing property evaluations."

If the above is feasible and accurate, knowing now that I still have to pay off $20k of HELOC...why wouldn't I use the same $20k HELOC as down payment for the same house and limit exposure/closing costs/time of refinancing? Or use say $60k and purchase 3 homes?

Thank you in advance for the help/guidance!