All Forum Posts by: Buddy Holmes

Thanks @Marco Bario and @Chris Seveney for your comments.

The "fee" I was talking about was in addition to the interest rate for the actual use of funds which would be 5-6% in my case. The not is unsecured for a trusted individual which I am mentoring. I had not thought of the charge at the time of the draw but rather some monthly steady payment for the access to the LOC funds and that being a lower rate. Thanks for your thoughts. Perhaps the "fee" should be called a monthly "access charge" for the LOC.

Cheers,

Buddy

I have an investor that wants a line of credit type note. He would like a fixed rate, 30 yr amortization when using funds.

That is fine but i would like some compensation when it is not drawn due to tying up the use of my money.

What would this "fee" be called?

Has any one done one like this?

What is a reasonable %, maybe 1 or 2%?

After a bit more research, I think the 5 year rule (121 xx) on 1031 Ex properties was 

related to my other rental which we had lived in for 2 years.  So no 5yr issue of a straight rental for almost 5 yrs and then forced to sell. Correct?

Cheers,

Buddy

We have a 1031 EX SFR which had a major fire last month. Rather than go through the extended process of rebuilding we have sold it to a (BP) Flipper. Not closed yet.

The property was obtained in a 1031 Exchange ~46 months ago.  I learned from a prior post that there is a 5 year rule before selling.  Not sure what the consequences are of this but would like to avoid any.

I might be able to do another 1031 exchange from this to a DST.

In the case of a sale to a Flipper the net sale for 1031 consideration I suppose would be 

Flipper sale Net + Insurance Payment.    So a new purchase would have to match this Net $ out, the new mortgage would have to be >= old mortgage payoff.  Correct?

Any other rules other than the time rules?

Cheers,

Buddy 

To all those who help on this question, Please take a look at my other 1031 forced sale due to a major fire. 1031 Exchange at same time about 4- years ago.

Thanks,

Buddy

Wow! Thanks for all the thought and advise. I didn't know the 1031 hold for 5 year rule, but was thinking of the live in 2 of 5 years as being my problem.

i Couldn't push for 5 year with my wife living there, but should have gone back to renting perhaps.  Looks like I pay for my poor planning.

Thanks again for all the help.

Cheers,

Buddy

We had a 1031 exchange property which was a new construction rental for about 14 months, then we used as a residence for two years. We sold it at just under 4 years with the idea of a residence sale after living in it for two years.  The letter of the law says live in 2 of 5 years.

Any room for using this exit?

Actually, I expected my post to be removed as well.  It seemed like an appropriate story, indicating that of all people, the BP folks being quite familiar with the tax benefits of RE investing could understand the Trump tax returns being no or low tax payments.

Cheers,

Buddy

Strange that a story which was sent to me in an e-mail is no longer on the BP site.

I hope BP is not into PC cancel culture!

@Daniel Z Fang

I had a property in CA where whole HOA had this. They found a plumber who came in aand ran pex inside old leaking copper pipe much less expensive.