All Forum Posts by: Derek Todd McCarley

Instead of writing an elaborate response. Lets just keep it Simple. 

1031 exchange

Say you missed the window for 1031 or prefer not to 1031, what then is a recommendation?

Derek, here's my advice: Don't do it.  I say that very directly because not one person told me to not do it back in 2007.  Everyone thinks it's a great idea to have vacation home. I mean come on, we've worked hard already and made some money. We deserve it!  Well, I don't agree because it backfired on me and I'll tell you why it might for you also.  When I bought a vacation home in our local mountain ski resort area it was 2007 which we now know was the height of the market.  What about today in Park City? You said so yourself, it's already the height of the market! Not a great time to buy real estate.  I spent a lot of wasted money and ended being negative cash flow for 8 years (I wasn't willing to foreclose like everyone else did) until I could sell for the mortgage balance and get out, after losing around $140k.  This could happen to you (what? my real estate agent, mortgage lender, insurance guy, attorney, title rep never told me this?!!)  I learned years ago from Robert Kiyosaki that everyone listed there is selling something. Guys like me are true mentors and giving advice I would want...  Here's another thing. I can buy several "vacation homes" now but I never will. Want to know why?  Because we can stay in any Airbnb across the world for a nightly fee. No other expenses, property tax, insurance, etc. And can go to multiple locations (rather than one). That reminds me: After owning our vacation home for around 6 months my wife was asking about family vacation location we should start booking. I said, our money is in this house and our vacations need to be there. To that she said, "we can't just go to the same location every time we want to get away!".  Hmmm a conversation I guess we should have had before the purchase.  The ultimate advice I can give, get back to true investment property purchase and ownership. Buy with positive cashflow rather than the money pit the vacation home will be. Then go to Park City is some else's bad-*** Airbnb whenever you want.