All Forum Posts by: Naeem Kapasi

I am a Realtor and wholesaler in San Antonio. I can tell you that the rental market here is very strong. You can easily hit the 1% rule in this market. You CAN find those deals on the MLS, but your best bet would be to work with a wholesaler who finds these properties for you at a discounted price. But you must know that most off-market deals will require some level of rehab before you put it for rent. Which is a good thing in my opinion because you get the opportunity to get equity in the deal by raising the value of the property. My two cents.

@John Underwood @Linda Weygant @Michael Plaks @Natalie Kolodij Thank you everyone for the great insights. I was going to ask her to talk to her CPA or a professional regardless, but I made this post to learn about this issue myself and what possible options are out there. Always keep learning. I understand it as there are tax advantages for her if she pursues seller financing, as she can spread the taxes over the terms, make interest at the same time (and probably pay taxes on the interest she makes as well, if I'm not mistaken). But then again, due to her age and life expectancy, she was thinking a term of 2-5 years. Her and I have not agreed to anything as of yet, just talking and brainstorming possibilities. The way I do business is I genuinely try to help people, ethics carry a lot of weight in my solutions, so not taking advantage of anybody, all involved parties will know what's what at all times. 

Again, thank you guys for the information and feedback. I appreciate you!

I was talking to a landlord who is thinking about selling her rental property in San Antonio, TX. We were talking about capital gains taxes that she will have to pay when selling her rental. The rental is worth about $220k. Now I am not a CPA so I don't know anything about this topic. She had two questions, which I don't know the answers to, so I'm asking y'all, and whoever knows about this topic, please speak up :)

1) If she sells her rental the traditional way, and gets all her money out at once as a lump sum, can she put that money towards paying down the mortgage on her primary residence to reduce the capital gains taxes?

2) If the buyer obtains seller financing from her, does that reduce her capital gains tax liability?

3) What other options does she have to reduce her tax liability? She is 87 years old and does not want to buy another investment. She just wants the money from the rental as that's her life savings.

Thank you in advance for any feedback!

Thank you @Brian Sparr for the input! I just read your message, but yes, we ended up doing all of what you mentioned. I actually gave the appraiser one comp that was favorable for us, but across a major street that divides two neighborhoods. It ended working for us as the value we got was $2k below the offer price (so we had to adjust the price down $2k according to the appraisal). We ended up getting more than what we were anticipating before putting the house on the market, so we are happy with that. 

Thank you so much for all of your input, truly appreciate it!

@Russ Marlborough If I were you, I’d pull comps to see what the market value for those comps are. Maybe you can put together a packet of document and challenge the appraisal? I know people have done it before with success. Listen to the podcast episode with Andresa, in that episode she give good tips on challenging appraisals (I can’t recall on the top of my head what the episode number is but was sometime after episode 310 I think). Good luck!

Thank you for the reply @Ben Sears! All of those sold comps that are showing properties with same size and age, are not updated (they still have the interior from the late 80's), which is why I am having a hard time to find comps that support my asking price. We are under contract for what we asked, so clearly, the market is willing to pay for it. But how do I convince an appraiser, in case he will give us a low appraisal?

I will send him the executed documents for the contract.

I am preparing a list with the upgrades that we have done. Should I attach photos to that list, or would it be enough that the appraiser sees the upgrades in person when walking the house?

Hey BP Nation. We have been doing a live in flip over the past two years. We have done many upgrades to the house, and most comps in the neighborhood are not updated (they still have old school interior). As we get ready to sell the house soon, how can we assist the appraiser with our input so that the appraisal can be more favorable for us?

Thanks.

The colors work really well together, great jobs guys! 

I didn’t understand either as it sounds more like a turn key model where you rehab a property, place a tenant and then hand over to a buyer. 

 @Mark Sewell Thanks for replying Mark! I believe you, they probably do some work to make it a deal for themselves, no doubt. But I have seen a "deal" from them, and then seen the same house on the MLS for the same price. In that scenario, as a cash buyer, I'd rather buy it from the MLS, pay $100 for option fee instead of paying non-refundable $5000 as earnest money. When you see one or two of these from a company, the image you have of that company kind of, you know..drops. But like it was mentioned further above, unfortunately there are many new investors who buy from them!