All Forum Posts by: Debbie C.

Is it common to ask your real estate agent to be the renovation manager/architect for a newly acquired fixer upper rental property you got through him/her? If it is, then what is the typical cost of this service? And is doing it this way better than just asking for contractor recommendations?

I have a question about the 1031 exchange that I’m still confused over. Let’s say I bought a property for $200k and rented it out for many years and paid off the mortgage so it’s free and clear. Now I want to sell it and I first spend $50k doing improvement renovations before selling. Then I find someone that’ll purchase it for $500k through a 1031 and name myself a replacement property. The costs of selling (agent fees, etc.) let’s say are about $20k. It’s my understanding that my potentially taxable gain would be $230k in this case ($500k minus $200k + 50k renovation + 20k costs to sell). However, is it true that the replacement property must also be $500k (and not $230k) or above for me to avoid capital gains taxes? And if so, does that mean if I wanted to buy a replacement property with my sales proceeds in cash (avoiding any mortgages), I’d basically have to use all of the $500k I got from the sale….meaning I wouldn’t be able to pay back the money I spent on the renovation and the other miscellaneous costs involved in the sale. Is there any way at all to do renovations on the property you want to sell in a 1031 without putting yourself in more debt?

My husband and I are trying to set up a 1031 exchange for the sale of our house which is free and clear. But because we are older and nearing retirement, we want our son to use this 1031 money to continue investing in real estate for our family while my husband and I take a much needed break. From what I've read, once you start a 1031 you can't change the names. So we're wondering if we need to add his name to the deed before selling the property? Or perhaps another idea is to put it under an LLC with all our names in there? Does anyone have any recommendations? Thanks!

Thank you guys, you really made my day! Who would you recommend I go to in order to start this process? A lawyer or a CPA? 

Also, I've seen people warning about depreciation recapture, but I'm not sure if I totally understand it. Is this something to be worried about in my case? 

My husband and I have lived in our home for 40 years and it's value has increased by almost $2 million over these years. We'd like to sell our house at some point in the near future because we're getting close to retirement. We're wondering if there's a way to use both the 1031 exchange AND the section 121 exclusion together when we sell our home?  The idea would be that we'd move out for a year or two and rent out the house so that it'd convert from primary residence to an investment property. Then we'd (ideally) be able to take out $500k tax-free, and the remaining $1.5 million we'd re-invest in a replacement property through 1031. Is this possible or am I being too naive? The thing I'm most unsure about is whether the IRS will let us do a 1031 exchange because we've lived in this property for 40 years and have never used it for investment purposes before. So I don't know if renting it out for a year or two would be sufficient to qualify it for 1031. Does anyone have any experience with this? Thank you.

What are the best options for taking out a loan to do a full remodel? I own this property (3 bedroom) and have already paid off the mortgage. The estimated cost of the remodel looks to be about $300-$400k. I don't know much about loans, but do you guys have recommendations for where to look, especially for a house with no mortgage? Thanks!

Does anyone have recommendations for a good home appraiser that is located in Oakland? Thanks in advance!

Selling it as-is would certainly help avoid many headaches! But I just want to make sure that I'm getting the most bang for the buck. Who would you recommend that I contact that could help me get more information? My agent hasn't been very helpful so far.

My house is a 3-bedroom in the S.F. Bay Area. Similar 3-bedroom houses in good condition around my neighborhood have been selling for $1-1.5 million. How much does it normally cost to rebuild a house or do a complete renovation? Does it depend on where you are located?

Is an appraisal the "final word" in deciding what the approximate value of the home is? And do you think it's necessary to get more than one appraiser?

I've read about horror stories of people spending over budget when they try to fix something because they keep uncovering new problems, so that's why I was considering just starting from scratch. Are there any more details you need about the situation that would help?

Thank you for your advice!

Hello everyone,

I’m in a bit of a dilemma and I just joined Biggerpockets to see if someone can offer any suggestions. I had plans to sell my old house which I’ve had for almost 40 years (yes, I am a grandmother!). This house is very old (1920s) but in a very good location in the Bay Area. My real estate agent helped me with organizing inspections and they found many problems with the house, including issues with the foundation and the roof. They said I could sell the property as-is, but I probably won’t get very much for it. Or I could try to fix things, but it will be very expensive because there's lots of issues. I’m starting to wonder if I should just tear down the entire place and rebuild a new house? If the problems are as bad as they seem, I feel bad about throwing away my 40-year old investment like this, especially since the Bay Area is such a popular place to live now. But I don’t know anything about how these inspections work and how to analyze whether it’s more worth it to: 1) hire workers to try to fix the problems, 2) tear it down and rebuild, or 3) sell it as-is. Should I try to get a second opinion, or talk to other people? I don't even know where to start or who I should talk to. Hoping someone here can offer some advice. Much appreciated!