All Forum Posts by: Dan S.

Hey BP community...

I am talking to a guy about selling one of my properties to him and I had a question about tax implications as I am being told if I do it this way I am avoiding some taxes...

Here is what we are talking through.

Price of property 400K.  I currently have a mortgage of 100K on it.

1 - Do a refi and assuming it appraises for 400K take out 65% or 160K (assuming the 100K debt already there 65% is 260K ) in lump sum cash - and new owner takes over paying that as they take control of the property.

2 - The remainder owed to me (400K minus 160k) 240k they pay me out in installment with a balloon.

The buyer is saying that they would put the property into a trust and be the benefactors but I would still be trustee in charge of property.

So again questions is - am I (legally) avoiding paying capital gains tax on 160k if we do it this way?
The buyer is suggesting that this is so, but I am not so sure... 

Thanks!

@Noah Lefholz did you find a provider?

I am looking for one too.

Thx

@Peter M. - this was a while ago but researching the situation --- I have a lease and interested tenants  - lease is not signed yet by them --- I forgot to include mention of lawncare in there - the tenants asked who is responsible.

Do I say you are - and add an addendum.

Do I hire a guy and charge it back?

Do I hire a guy and charge it back at a discounted rate?

Thanks.

I think this should go in this forum... So, maybe it is a little desperate on my part but I could squeeze into this what appears to be a highly cash-flowing storage facility (actually 4 separate) in Trenton, NJ. It is about 1/2 hour from my house. Some of the neighborhoods are iffy. Numbers are good --- NOI - if it s true is around 40K for a 250K investment. It's a total of about 46 units. They are the kind that are garages that are curb side in the middle of a city neighborhood. There are 4 sets of these of about 10-13 each. So, I could borrow to get this down-payment and walk away, after I got some financing (I think I can get), of about 10K a year. Hopefully, I am having other money coming in to pay down this loan as well. Now, it's not in the best area - that is a concern.

Anyway- just putting it out there - thanks for anyone's help here. 

Dan

Investment Info:

Small multi-family (2-4 units) buy & hold investment in Collingswood.

Purchase price: $100,000
Cash invested: $75,000

Not rented yet - still rehabbing.

What made you interested in investing in this type of deal?

Good area, good price on house.

How did you find this deal and how did you negotiate it?

realtor - I low balled offer, didn't get, first offer fell through and I got call back

How did you finance this deal?

Hard money

How did you add value to the deal?

fixing up place

What was the outcome?

Still TBD

Lessons learned? Challenges?

Still working it through - took a while to determine how much to fix up

@Thomas S. and @Nathan Gesner   - Thank you!

@Dan Schwartz

Thx @Linda Weygant spoke to accountant and switched me to dealer for filing!

I have a property that I recently rehabbed and I have on the market. I had it listed for a couple months and brought the price down due to no applicants (but I had had lookers). My post said no dogs, cats only. More recently I got three people interested who have dogs (people don’t care what the ad says)—so I am wondering if I can go back / should go back and raise the price and say with dogs.

Can I do that?

Also, I am new to this as I said. In this one scenario a person applied who says she has adequate income. Now she says that it will be her and two others applying. Does that mean all three will need to be on lease and all three will have to have adequate income? Or is she one who will be paying me and they pay her their share? And, if it is three, do the utilities go in all three names? How would that work?

Thx for helping out a newbie!

Dan

@Linda Weygant I like the way you explain things. Thank you.

@Linda Weygant - but what if it is a part-time job? And, what if it is only 1 flip a year? Doesn't matter?