All Forum Posts by: James W.

Hi gys -

I am planning to sell my Investment Property that I bought in 2012. 

I'll do an example below just to understand the taxes payable.

• Can someone with real experience relate if they really had to pay these taxes?
• Which of these does 1031 defer? All? Some?

Lets say I bought a condo at 650K. Sold it at 1220K.

Paid 10K in improvements, 10K in closing costs, 50K in commission.

Net Profit = 1220 - 650 - 10 - 10 - 50 = 500K

Depreciation Claimed over years = 50K

Therefore, Capital Gain = 500K + 50K = 550K

Taxes Payable:

Fed Capital Gain = 15% of 500K = 75K

Depreciation Recapture = 25% of 50K = 12.5K

NJ State Capital Gain = 8% of 550K = 44K

Total Taxes = 132K

Effective %age  = 26%          [  132K / 500K gain ]

I dont think seller can sell the property with a lien on it. Someone has to pay it before the Deed can be recorded. Mostly the seller, unless you agree to pay it and clear the lien.

you mention the bank is trying to do cash for keys with occupants. is it any different when bank is actually auctioning it away - and the investor has to do this? 

also - is there a person going and talking to the occupants? curious what is your involvement in the process. thanks.

 Thanks. How much is this cash for keys typically. We talking in thousands of dollar? any examples?

Also - if its such a pain the place - it better be 50% below market to be investors while. I am yet to bid on something like this but thats what i am thinking.

Thanks. Does anyone know the law in New Jersey around evicting previous property owner or tenants after buying an auction?

Hi,

Recently I've come across several bank auctions that are occupied - by owner or tenants.

i believe the bank has foreclosed on them and taken possession , but the dweller has not vacated yet. So they do not have interior pictures in the listings, and also don't have financing option - they are cash only.

Since the deed must have been transferred to bank during possession - I also think the title of these properties is clear and free of any liens.

Does anyone know how hard is it to take occupation of such properties after winning the bid?

Hi guys,

Why would an investor hope to get a deal on a short sale?

I understand that the debt may be more than the market price. So the bank would approve a sale at market price. 

But what good is it for an investor to buy at market price?

I hear investors trying to buy short sales 30% below market. And some have done it successfully.

But the question is - why would the owner want to sell so much below market? When he can simply work with a realtor to get market price, may be a tad less. And why would the bank even approve the sale below market?

Thanks.

thats great then. thats what i thought. i think after making the deal we just get a RE attorney - and he should be able to pull in all parties and artifacts of closing.

thank you.

PS - this should be possible with a financed sale also, btw. but i dont want to keep on going.

Well I am saying its a cash transaction. So no assuming the loan.

House is 400k. Equity is 200K. Default is 300K. I pay the seller 300K (bookmark here). Seller pays the bank. Loan is closed. I guess at this point Seller owns the home.

Bookmark - at this time - when I pay the seller or bank directly the 300K - seller can write a contract with me to transfer the title and deed to me with an attorney.

No?

So there's no transfer of loan here.