All Forum Posts by: Keith Andrews

Not sure how you will be able to pull this off. The bank will want to see the down payment physically come from you from reserves not a loan. Can you talk the seller into taking a smaller down and seller finance the rest at a reasonable interest rate that you can both agree on? I recently purchased a duplex using sellers financing and in my case I negotiated 10% down and the seller held the note for the rest at 4.5% amortized over 30 years. The benefit to me was less money down and no PMI with a damn good interest rate for an investment property. The benefit to the seller was monthly cash for the life of the loan, more money in the form of interest and less capital gains since the gain would be broken up over time. See if the seller would be open to something similar.

@Brad Hammond why are you selling? How much do you owe?

Thanks @Marcus Auerbach and @Weston Couch!  Great article!

@Michael Plaks

My wife paid the mortgage prior to being put on the title.  When she moved out in 2008 her brother started paying the mortgage, this is when her parents decided to add both of there names on the title.  It was there way of saying, "Thank you" and giving her an investment interest in their home.  I really hope we can somehow figure out a way to qualify these funds as @Dave Foster suggested and use them to purchase a rental property.  It doesn't seem right that she should be liable for 25% of $1M meaning we would owe more than she even received.  

@Dave Foster What would we have to do to pull this off?  I will talk to my CPA today, but am looking for any creative ideas you guys have.

Thanks everyone for chiming in, I really appreciate it!

I am hoping a BiggerPockets tax guru can help shed some light on things for me.

My wife’s parents added her and her brother to the title of their primary residence in 2008 (because they were paying the mortgage for them). They originally bought the home in 1980 for $100k. Throughout the years they pulled money out increasing their debt on the house to $300K. They just sold the house for $1M. My wife will receive 25% of the proceeds which equates to about $150k after everything. My questions are the following:

1. Will we have to pay capital gains on $150K or 25% of the gain from 100K to 1M? Or would it be the value of the house when she added the title in 2008?

2. Since this house was her parents primary residence (my wife hasn’t lived in the home for 15 years), is it eligible for a 1031 exchange or any other tax shelter?

Thanks!

@George Hinerman first off thank you for your service and as a veteran myself I salute you for building your real estate portfolio while serving. When I was in I didn't have that mindset, so didn't begin until I got out. You are way ahead of the game!!! Will you be renting this property out or will it just remain vacant? You most certainly can refinance it to a conventional loan as long as you have 20% equity in it. I have done this many times… I have used my VA multiple times in the last 10 years refinancing it to a conventional loan each time so that I could free it up to buy another property.

@Eric Littlepage I’ve been using https://www.rentecdirect.com/. You can add multiple bank accounts and credit card accountsI. Not only that, but it also has a tenant portal to take online rental applications, perform credit checks and process rent payments online. It also allows you to market vacant properties that syndicate to Zillow and other sites directly through the site, and much more. Their customer service is also superb!

This is my forum post. Over the last year I have purchased via traditional financing, rehabbed, and successfully rented out several properties. While these properties are owned by me personally my LLC manages them… All rents and expenses funnel through the LLC. My personal goal this year is to have 5 rentals under my belt. I'm at a point now where I think I should better protect myself and as the cash flow begins to increase I'd like to maximize my tax benefits by fully transferring over the property titles to my LLC. I know that this could cause a due on sale to kick in from the banks that currently hold the mortgage, but outside of that what is the best type of transfer to maximize my protection and to also allow me to begin from an accounting standpoint fully running everything through the LLC?

Looking forward to some experienced advice. Thanks!