All Forum Posts by: Matt E.

Update: Auction is postponed for 6 weeks. I admit I am relieved. I have been researching this for weeks, but I could use a few more weeks of research...

Good Evening,

I am looking at bidding on a house tomorrow at an auction through Auction.com. I have reviewed the title report and there is an existing federal IRS tax lien for $40K. Any chance that could be "negotiated down" with the IRS? :) 

The first mortgage holder has initiated the Trustee's Sale for tomorrow. The number three lien on the report is for $24k and dated February 2014 and is in favor of "The Secretary of Housing and Urban Development" 

Does anybody suspect if this could be tied to a PACE loan, and if so, are PACE loans now subordinate, and get wiped out at the sale? I have checked the property tax records and I don't see any special assessments linked to a PACE loan. 

If this isn't a PACE loan, any ideas on what kind of lien would be in favor of HUD? and will it get wiped out?

Also what are your opinions on purchasing the title insurance through Auction.com?

FYI the current owners have owned the house since the mid 90s and the current first trust deed was originated in 2006.

Thank you for your advice and input.

Thank you very much for taking the time to analyze my situation. I appreciate your expert input.

Well that rains on my parade...

Also, I have heard this to work for owner occupied duplex/triplex/fourplex.

(Though not applicable to my case)

My wife and I bought a property 50/50 with my In-Laws. We bought it in September '13, knowing we would sell it to an interested home builder. The property sits on several acres.

I have read of scenarios where you can claim a percentage of the property as your primary residence to reap the benefit of the 121 exclusion ($500K Exemption), and the other percentage as investment property to earmark for 1031 exchange. This seems to work with farms and ranches.

My question would be, can my wife and I take residence in the house for two years to claim the 121 exclusion, and turn the remainder of the property into a working farm or ranch to claim it as investment property eligible for 1031 exchange?

It would pencil out like this:

Sales Price: $3,600,000

Basis: $600,000

Net Gain: $3,000,000

Our Share (50%): $1,500,000

121 Exemption: $500,000

1031 Eligible: $1,000,000

Primary Residence: 33.33%

$$ Producing Land: 66.66%

We now have the property under contract with a home builder. Escrow is 24 months to allow for completion of zone change as well all city approvals. This gives us just enough time to hit the 2 year rule for the 121 Exclusion.

Any thoughts??

George, some acreage we own is a key piece of land for a new development. We are just in the right place at the right time.

John Holdman, I missed that it said cash on cash. My apologies for that, I should've read that much closer. Also, It seems as though the knowledge here and advice you guys share is immeasurable. I am looking forward to getting to know some of you guys.

John, thanks for the heads up. Is there a good book on investment properties?

thanks for your input. I am assuming that is with a purchase price if $1.5, how much leverage is too much leverage? At what purchase price/ finance amount would it be difficult to expect a decent rate of return? Assuming a cap rate of about 7%