All Forum Posts by: Jeet Sangha

It's going to cost you time and money to get that $3k. Not sure if it's worth the trouble. I guess you can deduct it on your taxes as a loss. 

Some of you might be facing the predicament of buying and selling a home at the same time. This can be challenging especially if you need the funds from selling your current home to buy the next one. If this process is not handled carefully you run the risk of losing out on the home you want to buy, getting a lower offer on your current home or worse having to move out without securing your next residence. In this article, we will explore five smart strategies to ensure a seamless move without the stress of being homeless. So, let's get into the options that will help you smoothly make the leap to your new dream home!

Bridge Loan: If you have substantial equity in your current home, you can opt for a bridge loan to finance the purchase of your next home. A bridge loan is a short-term loan that allows you to borrow against the equity of your current home to cover the down payment and closing costs of the new home. This way, you can buy the new home before selling the old one. Once your current home sells, you can use the proceeds to pay off the bridge loan. However, it's important to be cautious with this option as bridge loans often come with higher interest rates and fees but it can be worth the cost if you don’t want to miss out on the home of your dreams.

Ask for Rent Back: When selling your home, you can negotiate with the buyer to arrange an extended escrow period or request a rent-back agreement. In an extended escrow period, the closing date is delayed to give you more time to find and move into your next home. Alternatively, in a rent-back arrangement, you can rent your own home back from the new owner for a certain period after the sale is complete. This allows you to stay in your current home temporarily while you finalize the purchase of your new home. In a competitive environment, some buyers may allow you stay for free to make their offer standout from the rest.

Live with a Family Member: If possible, you could consider staying with a family member or close friend temporarily until you find your next home. This option allows you to avoid staying at a hotel while you search for a new property. Staying with someone you trust can also provide you with the flexibility and time needed to make the right decision for your next home purchase.

Simultaneous Close: In a simultaneous closing, you coordinate the closing dates of both the sale of your current home and the purchase of your new home. This requires excellent communication between all parties involved, including both sets of buyers and sellers, as well as the real estate agents and lenders. The timing needs to be precise to ensure a seamless transition from one home to the other without the need for interim housing. I highly recommend you work with experience professionals in this type of transaction.

Sell, Rent, and Buy: Another option is to sell your current home and rent a temporary home or apartment while you search for your next home. This allows you to be flexible and not rush into a new purchase. Renting for a while gives you the freedom to explore different neighborhoods and take your time in finding the right home that meets your needs and preferences. This is especially true if you are moving to a completely new place.

Regardless of the approach you choose, it's essential to plan ahead and be well-prepared for the challenges of a simultaneous move. This includes having a clear understanding of your financial situation, working closely with real estate professionals, and staying organized throughout the entire process. Moving between homes can be stressful, but with careful planning and the right strategy, you can make the transition as smooth as possible.

Jeet Sangha, REALTOR/INVESTOR

San Jose, CA

Quote from @Bryan Odom:

Hi

I want to meet with an investor-friendly CPA that could advise me on the best way to use the money in my retirement fund to purchase a property. Can anyone recommend one? If not, I would greatly appreciate any advice on the best steps for finding a good CPA.

Thanks in advance.

 Hey Bryan, send me a message so I can share my CPA's info. He can handle that for you. 

Investing in out-of-state properties is an appealing idea, and it's easy to understand why. However, it's crucial to remember that building a reliable team of trusted individuals is essential. This team should include property managers, realtors who offer sound advice as if they were investing their own money, and reliable contractors, among others. Be prepared for occasional trips to deal with emergencies or inspect your properties, which will incur additional costs.

Many investors in California choose to invest out of state primarily to generate cash flow, while they seek price appreciation within California itself. 

Hello Alex,

As Joesph mentioned, you have to be a qualified real estate professional in the eyes of the IRS. You will have difficulty meeting that requirement if you have a full-time job elsewhere. On top of that, you, your spouse, or combined have to have at least 550 hours in material participation.

I'm Not a CPA; just sharing what I learned during our Cost Seg process. 

Hello Chandra,

I know it's kind of an old thread. I deal in both commercial and residential so I suppose I can speak to it.
Most commercial lenders, almost all lenders will require at least 20% down. 

You may not be able to occupy one of the units as a primary on a commercial property, it will affect your DSCR. Most lenders will not allow that; you can potentially occupy it later once it's bought.

You can certainly use a residential realtor as long as they have a good understanding of the investment side. You may be able to buy a commercial property with your H1B visa but the lender may require a higher downpayment. 

My recommendation would be to look for 4plexes, You can put as little as 3.5% down, occupy one unit, and get a competitive interest rate. The interest rate on commercial properties is also going to be higher. 

It seems unlikely because can't own a home for the last three years. I recommend calling them directly for a definite answer. Also, check out the Empower Homebuyers down payment assistance program, which is run by Santa Clara County. I believe they have the same requirements. 

I've never come across someone seeking a developer coach before. My recommendation would be to attend local real estate meetups and inquire if anyone there can introduce you to a developer coach from their network.

Quote from @Gayle Eisner:

Greetings:

I am a small timer but I own three rental properties.  Currently, I have a CPA that I have been using a few years.  I am not an expert in this area, but it seems that I am the one that has to point out to the CPA my deductions for the properties via my research....  Isn't that their job to help me by pointing out and suggesting areas I can save money?  Or is it MY job to do that or ask him?  Also, I have found errors in my last years tax return and I guess I need to point them out to him? Im just curious as to what others are doing and whether I should either hire a new CPA and ask questions when I hire him or just hire a regular tax person for a lot less money?  Your experience and guidance is much appreciated!   Gayle

Hey Gayle, We recently switched to a new CPA for similar reasons. We are very pleased with our new CPA. He is an investor himself and specializes in Real Estate. He helped us navigate cost segregation studies on several of our properties. Let me know, If you'd like me to make the introduction.

I'll email you the contact information of our CPA. He saved us tens of thousands of dollars just in one year. By the way, he is from California.