All Forum Posts by: Kevin Wasie

Also, I'm very confused about why property needs to be more than $95k.

If im trading on a like exchange, if my net return after sale is $40k, I only have 40k of equity. Why can I not just go buy a $40k house, as I not have traded for the exact same amount of equity?

@Dave Foster What if the HELOC is paid on the settlement statement? Does that make a difference? I do not want to reinvest the whole HELOC again.

The title company can do that. 

Great information all. 

One caveat to throw in here...

$55k that I invested into the original purchase of $70k is from a HELOC.

Does this change anything, or is that considered cash? The HELOC and the purchased investment property are both in my personal name.

Thanks! @Jay Jasunas @Bill Exeter @Dave Foster

Hello, I am going to complete a 1031 exchange for the first time.

I recall that I read in a book that most people do not understand the boot rule correctly, and many 1031 QI's implement it incorrectly. Specifically, the book indicated that you do not need to purchase a property that has same or higher LTV.

For instance, this book stated that you could purchase a property with lower LTV, and a lower value, as long as the equity stake is the same. This makes sense, to me, as it is a like-exchange.

However, all of the information I read online states something different. I am trying to find where this information is, and what book that was, so that I can take advantage of it/contact the author for assistant.

Here is my scenario: I purchased a property for $70k. I am now selling it for $95k. There is no loan on the property. 

I want to take the $25k gain and purchase a property for $40k (with the other $15k) from my cash funds. 

I do not want to pay tax on the $25k gain. 

Thank you. 

Fireland title. In house abstractor. Also, a large percentage of their business is investor/developer/new builds. Small shop, big numbers, no waiting to talk to anyone.

granite and cabinets direct. I think they are on w130th. Lowest cost, small selection. 

According to a recent article published on NYT, over 90% of Americans strongly agree that it is a civic duty to pay your maximum taxes, and many find that trying to dcrease your taxes is unethical.

Personally, I want to decrease my tax burden, and pay the IRS what is legally required of me.

I am new to investing, and want to understand the taxes. I have a few questions for a deal that I am working on right now.

I have a property under contract, that Is going to be a BRRRR deal.

The attached picture shows the key values... I am buying it for $70,000 and putting $40,000 into repairs. For the purpose of this discussion, assume that I am paying cash for the property on January 1, and there are $0 closing/refinance costs. I will refinance to 30% LTV of th ARV which is $150k

My questions:

1) is the "with rental" scenario correct? ... is it right that I will decrease my tax burden by the $40,000 in repairs? 

2) it looks like, if my math is right, that I will owe about $8000 less in taxes this year, and will have everything but $5000 returned to me at the refinance time. So, I'll actually gain $3000 of net worth, plus the forced equity, and I'll have a great rental.

Does all this look right? 

Jen, Thanks! A couple of technical questions...

Many of the banks I have talked to told me that the property would need to be seasoned for 1 year to complete the cash out refinance. I'm thinking that maybe this was possible because you used your own money for the initial purchase?

1) How did you get around that? What bank was it?

2) Was the property initially titled to you?

3) Do you carry your properties in an LLC or personal name?

4) What LTV did the bank allow you go to for the refinance.

My reason for asking the detailed questions is because I am also in the Akron area and running into a couple snags on a similar deal that your information might help me with. 

Thanks a bunch for your time!