All Forum Posts by: Eric Robert

 Thank you all for the wonderful feedback. I see everyone's point and it looks like I have some minor homework to ensure that everyone is covered. At the end of the day, this is a Great tenant and I dont see myself stressing over the Babysitting issue. I just want to do my due diligence in protecting myself and my tenant.

I have a WONDERFUL Tenant who has been with me for years in a Duplex in Los Angeles County. Rent is always on time and I have zero problems with her. I hope she stays for as long as I have the rental unit.

Recently, I have discovered that she earns extra money by "Baby Sitting" 2-3 kids, ages 2-5 years old. There has never been a problem and she is not advertising herself as a business or center for children. The kids are from families that she has a previous relationship with.

Questions:
1. Should I take any precaution steps in the Lease to address this "extra job"?

2. Do I need to increase any insurance in case a child gets hurt when in my property?
3. Am I liable if a child is hurt during Baby Sitting?

Any advice or guidelines would help. Thanks a bunch!

@Bill Exeter  Thank you so much for your information. 

I will now be able to identify the difference between the 1031 Exchange and 121 Exclusion rules.

Hhmmmm... I havent considered that I wouldnt need to use a 1031 exchange. Ive guess Ive read conflicting approaches to the sale of duplex investment but it becomes fuzzy since I live in one unit and claim it as my primary residence.

Im looking into selling my duplex and using the 1031 Exchange to purchase a property that brings in greater cash flow. 

Details

Mortgage - $350,000

Appraisal - $550,000

With this information I could roll the $200,000 "profit" into a bigger property. Here is where my confusion begins:

I use the front unit as a rental and I use the second unit as my primary residence. Would the rules of rolling over the entire $200,000 "profit" into the new property apply to me? Since I use the 2nd unit as my primary residence, would I be able to use some of the $200,000 as cash without any tax penalty?

Any thoughts or advice would be great!

Great post! April, do you have an update on your 1031 exchange? I am in the same boat but a few months behind you.