All Forum Posts by: Hans Thurau

Mobile Home Park(s)

I wasn't even looking when I stumbled onto my first deal. I was driving around looking for street parking and ended up parking in front of a beach duplex that had a "for sale by owner" sign in front of it. Contacted the seller, found out he was going into foreclosure and after a small down payment and a bank loan for $300K I owned California beach property. I still own the property, and it has since appreciated to $1.8M. I plan on selling it this year and using the proceeds to bankroll my next investment binge.

@Dave Foster, also there's the possibility that the new incoming administration may change the tax code; that's yet to be seen. I calculated the tax hit to between $200K-$250K...ugh! You bring up an interesting strategy relative to the 1031 exchange; in essence you pre-purchase the like-kind properties using funds from a REFI, then sell the subject property and use the proceeds to repurchase those same properties through a 1031 exchange. Very interesting strategy. I need to give that one some thought. 

Thank you for your quick response Dave. If I'm understanding you correctly, each income component is classified into it's own bucket and taxed as such. Does this mean that the interest portion would not be taxed as a gain?

Relative to 1031 exchanges, I looked into it; however, my intention is to use the proceeds to leverage several income properties over time. 

I have a beach duplex in Southern California valued at around $1.8M; I originally purchased it for $350K. If I do a standard sale, my long term capital gain minus my $250K primary residence exemption will be high considering my gains are over $1M. One strategy I considered is to offer seller financing (me being the seller). I do not have experience with seller financed transactions... would the down payment be subject to capital gains tax (and/or the monthly payments)? Additionally, are the monthly payments I receive taxed at the same "capital gains rate" considering there would be interest on top of principle included in these payments? Any advice is greatly appreciated.