All Forum Posts by: David Bittorf

Thank you!  Title Company and Real Estate attorney are the key ingredients I was missing.  I figured that I could get creative with the length of time etc once I had a starting point.  

I just heard about the idea of selling financing for the first time and I'm really intrigued.  Let me see if I have this right.  Let's say there is a property for sale at $400,000.  You could make two offers:  one at $375,000 with traditional financing and one at $450,000 with seller financing.  

Traditional Financing:

Pros for seller: Gets lump sum of $375,000 immediately  
Cons for seller: Closing costs, pays taxes on $375,000 (unless it's invested into a new property), $25,000 less than asking

Seller Financing:

Pros for seller: Gets $50,000 more than asking, no closing costs, no tax penalty  
Cons for seller: Paid out monthly ($1,250 for next 360 months), rather than a large lump sum

My question is this:  If the Seller says "Yes lets do seller financing".  Now what?  How do I get the legal contracts etc.  What else do I need to be aware of.  

@Carl Fischer

Are the taxes locked in at the time you purchase the place for the duration of the loan? Let’s say if the place you bought a place in CA for $500,000 and it’s now worth $1,000,000. Do you now pay twice as much tax per year than when you bought it or are you locked it at the original price. If you are locked in, do things change if you refinance? For example, it gets reappraised for $750,000 at the time of refinancing and now do you owe taxes on $750k for the new refinanced loan?

It seems to me like your taxes are based on your purchase price. For example, let’s say you live in area where taxes are 1.2%. If you buy a property for $500,000 are you locked in at 1.2% based on a $500,000 purchase? Let’s say in 30 years you had the property paid off and sold it to your son for $3,500. Would your son owe taxes based on $3,500 or would it be based on some appraised value let’s say $500,000 (assuming the place did not appreciate in 30 years). If your son only had to pay taxes based on $3,500 what would stop people from “selling to themselves” in the future to lower taxes.

Thank you!!  I appreciate you getting back to me so quickly. Does anyone else have any input if this is a smart strategy in this case or am I over looking something. 

I currently have about $115k in my Roth IRA. $60,000 is contributions. If I understand this correctly, I think I could pull out $60,000 for a 10% penalty ($6000). If I pull out the whole thing I think I would get hit with 10% + 22% on the gains. So, would it make sense to pull out $60,000 to buy a second property if that means I could rent out my current property for $500 to $1000 / month positive cash flow? Seems like my return on that would be better than the "loss" of leaving it in until I'm 59.5. Btw I'm currently 38 years old.

@Dan Heuschele

Thank you Dan! I appreciate your feedback.

Hello! I’m new here. Just starting listening to the bigger podcast and can’t get enough of it. Just wanted to feel it out in the forum to see anyone had any insight on the Air B-n-B regulations in San Diego. I know I can Air bnb my spare room but I’m not sure if there is a cap to how many Air bnb properties are allowed.