All Forum Posts by: Cee Jay

@Dave Foster thanks for the reply, that helps clarify things!

A couple questions if you don't mind. I'm a little confused on the specifics in regards to allocating only $300,000 for the 4 plex in your example.  My understanding is that the sales price of the 4 plex needs to meet a minimum requirement, (sales price of downleg) but there is no maximum price?

You said when purchasing the 4 plex, one could only use 1031 proceeds for 75% of the purchase price, since I plan to live in one unit. How does this translate to the downpayment and the capital?

Lets say for example, I buy a SFH with Granny flat for $500,000 originally. After 2 years lets say it's worth $750,000.

Let's say 2/3 of the value was the SFH I rented out and 1/3 the Granny Flat I occupied. In this case, let's assume I'm purchasing a 4 plex for $1,000,000. I can still use an FHA loan in my county and only need a $35,000 down payment. Does it matter where the capital comes from for the down payment?

My calculations show the Granny Flat Value went from $166,000 to $250,000... So I can pocket the difference tax free with 121 exclusion. Next, the SFH went from $333,000 to $500,000.. I can defer taxes on that gain via 1031 if I purchase a property with an investment value of at least $500,000 (subtracting the occupied portion from higher sales prices). Am I missing something?

Thanks in advance!

Hello BP,

I am doing my due diligence and researching to buy a duplex and house hack.

Specifically, it would be a Single Family Home with a detached Granny Flat, purchased with an FHA Loan.

My plan is to live in one of the units, (most likely the granny flat) and rent out the main house, (either long term or airbnb).

My question is when I decide to sell, what are my options and what should I be aware of in regards to 1031 exchange and 121 exclusion options.  I understand I need to occupy the property for 2 years to qualify for 121.  However, can I sell and take advantage of the full 500k tax-free gain (I am married).  Even though I lived in one unit and rented out the main house?

Also, my goal would be to buy another property with the proceeds of the first one.  I have read a 121 and 1031 can be combined and prorated based on the value of the unit rented out versus occupied.  But I'm a little confused on the specifics..

The upleg / 2nd property would most likely be a Fourplex where I occupy 1 unit.  I want to be prepared and educated about my options in advance.

If anyone has experience or can shed light on this issue/situation I would be very grateful!
Thank You!

Hello BP, 

Hoping to reach out to any MultiFamily Investors in the San Diego area. I am a younger professional involved in the business; as an agent specializing in MultiFamily. I am hoping to network and learn from eachother and talk about the market and opportunities. Setting up a Coffee meeting for one or several of us to meet and pick each others brains would be a great idea. Please feel free to add to this discussion in anyway! Hoping to talk and connect out there!

I work in commercial real estate and people/people who know experts are talking about a correction next year or soon. Aka a crash in the markets. Real estate market.. The market is at an all time high and besides obvious indicators as such... How do some of you experts know it is coming and why are you certain? Mind explaining where to research this topic on ones own. How can I start exploring on my own to predict a correction. Or know when it's actually going to happen. 

Thanks!