All Forum Posts by: Jj Horst

Thanks for your help all. Yeah I think that this is going to be a simple "just pay the tax" situation. 

So my wife and I owned and lived in a duplex here in Austin TX from 2015-2017 (just over 2 years). We then moved to a new duplex and rented out the original one. We are now selling the original duplex in order to fund the purchase of a single family home/primary residence. 
Its been too much time to claim we lived in the for sale duplex for 2 of the last 5 years (its been 7) to avoid cap gains. I was curious about 1031 exchange but it sounds like selling a rental for a primary residence would not count as "like kind" properties. 

I'm not trying to break any rules, but obviously if I can avoid paying taxes I'd rather do that!

If we sold the duplex, and then bought the single family home. But stayed in our current duplex, would that open us up to be able to claim 1031 exchange exceptions? How long would we have to NOT move into the single family home for it to qualify? Would it need to be leased at some point?

Obviously it sounds like I need to talk to a real estate tax professional, but I thought I'd get the communities opinion before going down that round.

(We don't want to sell the duplex we're living in now because its much larger than the other and will bring in almost double the rent)

Thanks!

Hi,

My buddy and I have a piece of vacant land for sale and have had a few inquiries. Most of the potential buyers say they would prefer doing owner-financing vs cash, but we'd much prefer to do cash only. Any advice on teams that would partner with people like us where we could get "bought out" for the cash price and the partner would hold the note and keep all the payments? It would make the buyers happy and everyone would make some money.

Its 40 acres in Terlingua Ranch (near big bend national park in TX) and we're asking $75k but it may sell somewhere between 50-70k. 

Thanks for y'alls advice. 

Thanks for the insight all. Yes the original plan was to switch sides (to the bad side) and renovate while living in it again but now with a baby on the way we really don't want to have to live through the dust and destruction again. I think ideally we would rent out the other side and then save and get a third duplex to house hack that's in less need of reno. Honestly with the state of the house I don't think the appraisal is off too much. We were just in a weird spot where estimates were as low as 300k and as High as 500k so we really didn't know where we were. Turns out right in the middle. 

Ok so the short story is my wife and I bought a duplex we were currently renting when the owner sold and were introduced into the magical world of house hacking and how great it was. WOW this is the way to go, how could it go wrong. We saved up about $30k and bought a second duplex a few streets down that was bigger, full of mold, and had a couple of tweakers living next door. again, what could go wrong?

We now live in the second duplex, after months of drama and legal BS we have evicted the tweakers who stopped paying rent in July. The first duplex is awesome and is rented to great tenants.

Did I mention my wife is was due for our first baby on Sunday? Baby coming any minute!

Tried to get HELOC on the primary residence with BofA after a lot of run around we aren't going to get it as we only have 20% equity after the appraisal ($400k). Bought the place for $328k. Side A is in pretty good shape after a year of work. Side B - Yeesh. It needs some love. (new kitchen, bathrooms if possible, new flooring, and definitely new electric panels.) Probably will cost $30k.

So my options are:

1. Continue to live here and leave side B empty. Its about $2800 a month 8 min from downtown austin tx. Fix things up here and there and maybe sell it in a year but MAN you're spending some money on housing.

2. Sell it an buy a single family - I could find something like a good 3/2 in the area for $255k, but that's it I'd be paying around $2k indefinitely no potential to rent out another side

3. Try and get it "liveable" for like...$15k. Might take one some credit card debt and risk having less than amazing people living next door but at least can rent for around $1300-1600. That takes a huge load off the monthly cost even if it means superhuman willpower to fix the place up with a new baby. Risk having to go through another eviction.

I hate to give up a piece of property near DT Austin TX and maybe torch my chances at early retirement ( would take years to save up enough to get another down payment as I work a normal job.)

I don't know BP community. What would you do in my shoes?

Extra info. My wife is tough as nails and I know she'll be down to take any path, that being said I think if it was up to here solo she would just sell the place and accept we'll be working our whole lives like everyone else.

Parker lane just E of i35 and N of 71. Neighborhood has been getting better every day.

@Dave Foster Good point. Thanks for the info!

@Justin Robert so I forgot final numbers

House A cashflows about $600 total after the mortgate/insurance/etc

House B I expect to cashflow about $700 total after the mortgage/insurance/etc

At least they're cash flowing, but for 2 properties totaling $850,000 in total home value it seems like if you had eight $100,000 properties you could make like...40% more rent then these 2.

@Danny Webber No kidding!

@Justin Robert You're totally right the numbers are pretty fudged just for that example. We purchased both properties with FHA (one after the other) to get the ball rolling so almost all the equity is from appreciation. They are both fairly close to downtown (8 min or so)

• Property A is probably worth around $350k
• Both sides rented = $2225 (which is actually decently high for the home and area)

• Property B is hopefully worth around $500k once the rehab is complete (we bought for $332 in abysmal condition, I don't know how we passed FHA inspection .... :) )
• Property B would rent for probably $3500 total ($1650 for the smaller side $1850 for the larger side)

Neither will ever come close to earning $1k of rent per $100k of home value so seems to make sense to try and take that equity and spread it out into properties where it can earn more rent, even if those properties aren't appreciating like these two seem to be.