All Forum Posts by: Harish M.

If you close in the same year, then there is no savings to the seller. But if you can delay it since it is a flip, close later this year, have him/her hold a note for $500K, and fund the rest with a HML/Loan. You can sell next year and he would get hit with the rest of his taxes. It would spread the burden between two years versus one year for the seller. This is not a huge saving for him but could give him relief to not get hit with that amount of taxes all in one year.

I see. If the total tax would be same paid in two years vs single year, I think he won't budge to sell. I need to offer something where he can save his taxes somehow.

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Quote from @Obed Calixte:

Why is seller against 1031 exchange?

Bad experience? Lack of knowledge of the process? Wants some cash out the deal?

based on the limited info shared, 1031 may be in their best interest if they are truly looking to sell.

He is 70+ and just doesn't want to handle another real estate, that's why.

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Quote from @Peter Mckernan:

You can ask for seller financing on the property, he holds the note for you and you bring in cash to close along with a certain amount of money to the seller at closings (i.e. $100K etc). Then you can pace out the sums of money, year two is 50K, year three is 150K, and so on. Then you talk to them about a rate for their interest rate they want and payments they want per month..

If you can do a lengthy escrow, 90 days, then if your rehab is long 3-4 months.. you could do half payment this year for the property, pay them interest/payment on their property and then pay them the second half of their net proceeds when you sell the place which at these timeframes would be into next year.

Thanks for your reply, Peter.

With seller financing, how would it reduce the taxes seller has to pay? I am guessing it will just help him to Spread out the gains over couple of years but in total he would still pay the full tax on the gains. Correct me if my understanding it wrong.

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I recently identified a single-family home (SFH) in California that is currently unoccupied and may require some rehabilitation. After reaching out to the owner, I learned that he is open to selling but is concerned about the significant capital gains tax he would incur.

It appears that he purchased the property in the 1980s for less than $100K, and the after-repair value (ARV) is approximately $1.5M. However, he is not interested in pursuing a 1031 exchange.

I am exploring potential strategies to help the seller minimize his tax liability. Any insights or recommendations would be greatly appreciated.

2 Votes

Hi All,

I will be soon closing on my first investment property (SFH). Looking for recommendations for Landlord insurance in the area. Please share. Happy Holidays and Happy New Year.

0 Votes

Buffalo, New York

Hi All,

I will be soon closing on my first investment property (SFH). Looking for recommendations for Landlord insurance in the area. Please share. Happy Holidays and Happy New Year.

0 Votes

Buffalo, New York

All Forum Posts by: Harish M.

Harish M. has started 3 posts and replied 6 times.

Post: Got a Flip deal but seller is concerned about huge capital gains. What can be done?

Post: Got a Flip deal but seller is concerned about huge capital gains. What can be done?

Post: Got a Flip deal but seller is concerned about huge capital gains. What can be done?

Post: Got a Flip deal but seller is concerned about huge capital gains. What can be done?

Post: Looking for Insurance Agent Recommendations

Post: Looking for Insurance Agent Recommendations