All Forum Posts by: Hans Cooke

Hi Dave.  I messaged you as well but it would be more beneficial to all for you to answer my question on this here as well.  :)

You seem quite knowledgeable in this area so big thanks for sharing with the community!

Here are my specifics:

Facts:

An inherited property is owned by 2 people as 'Joint Tenants' rather than 'Tenants in Common'. They are siblings and file taxes separately.

Joint Tenant 'A' has lived in the property for 9 years and claims as their primary residence for tax purposes.

Joint Tenant 'B' lives elsewhere and makes no claim for tax purposes against the property and never has.


Question:

When they sell the property, can Joint Tenant 'B' do a 1031 exchange with their half of the sale proceeds?

 Hi Bud,

My thinking after research is that the one property paid for with cash will have the highest monthly ROI (short term) and will be a safety net in case either of the other 2 are vacant for extended times. I understand where you are coming from though.

Hi Bud!

For me and my wife, it will be: Purchasing first investment properties (one paid in full with cash and 2 leveraged).

Merry Christmas and Happy New Year as well

Actually Ali this debate is helping me to gain a better understanding of the pros and cons of leveraging my available cash. I have not made a decision yet on what I am going to do and the more chatter I hear from both perspectives the better. Imo nothing has been off topic yet. :) Go for it

Besides just holding onto more cash to use for other investments, are there more advantages to mortgaging a rental property rather than paying for it in full?

I remember someone saying that the tax benefits were better and that there is more protection in the event of a lawsuit when you hold a mortgage.

Thanks Allen. :)

I always hoped that my time in the service would payoff in more than just character building. The VA Loan is GOLD.

Anyway, I am in agreement that it makes sense to use less cash upfront and have reserves for other investments. I just don't want to negatively affect our ability to get the loan amount we desire for our primary residence.

Great input guys. Thanks much.

I am beginning to understand the benefit of leveraging. It makes sense on many levels that you have pointed out.

One curve ball here that I forgot to mention about my situation and how it needs to play out for us. We are actually going to be selling our current primary residence and moving out of state to the area that we want to invest in.

The plan is to move into a future rental property (Condo etc) for 2-3 months to get our feet on the ground in the new area and then use a zero down VA Loan to purchase a single family primary residence for us. We would then rent the original Condo of course.

So, if we take out a 30 year conventional mortgage on the Condo with say 15-25K down (rather than buying outright with cash), my only worry would be how this mortgage debt would affect the approval amount of the VA Loan we intend to use for a primary residence.

Just starting out here...

Have $50,000 to invest in real estate.

Would you:

A) Buy one Condo / Apartment outright (paid in full) and rent it out

or

B) Mortgage two Condo / Apartment's (either 15 or 30 year) and put $25,000 as a down for each


I am leaning towards the first option.

Help me understand the pro's / con's of these choices.

Thanks