All Forum Posts by: Nick McMahan

Thank you gentlemen for your insights.  I understand and hope to employ the defer, defer, defer, die method. However, it seemed to me the accountant was stating that I would not be able to do a 1031 a second time because I was mixing 1031 funds and personal funds but there seems to be an alternative answer so I'll see if I can get clarification from him and repost if needed. Thank you all again. Best regards,

Nick

I am considering selling a property that will have about a 60k gain and using a 1031 exchange to purchase another property for 110k.  I will use personal funds from a Helock for the remaining 50k of the purchase plus any renovations.  I was told by a CPA that once the newly acquired property sells in the future the gain from both sales would then be taxable because I am mixing 1031 funds and personal funds for this purchase.  I have never done a 1031 exchange but was under the impression that one could roll the gains from one property to another and so on.  I'm exploring all the resources I can read and am still unclear.  Can someone clarify if I am understanding incorrectly or if I was misinformed?  Best regards,

Nick

Hey congrats on the first completion. Question though, I've purchased 2 thru auction.com as live courthouse auctions but none thru them after it goes back to the bank. How/what was the process for getting the title search and title insurance thru auction.com?

I appreciate your reply, I think it'd help more than just me...

Great idea and info... I'd like to see where you go with this. I wasn't aware multi family modular units even existed.

Thanks for the kind words Mike!

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $78,728
Cash invested: $37,272
Sale price: $155,000

This was my first flip. 4b2b 1760sf basement rancher. I learned a lot, cried a lot, cussed a lot, and smiled a lot. Then I decided I would do it again. It took longer being the first of course, but I was completing the work myself and working full time. It was finished about 9 months in, but held until after a year for tax reasons.

What made you interested in investing in this type of deal?

I had been talking with my family for several years wanting to get into flipping and with the birth of my daughter, I took the full amount of FMLA leave allowable to find one and begin the process.

How did you find this deal and how did you negotiate it?

Auction foreclosure

How did you finance this deal?

Cash and Home Equity Line of Credit

How did you add value to the deal?

Completed the work myself, with the help of many family members and friends and youtube.

What was the outcome?

Great, I wanted to move in though. I became attached to it thru the process and it was special for many reasons.

Lessons learned? Challenges?

I was a basement rancher, 3/4 siding, front brick, but unannounced to me it was a prefab home hidden very well. The inspector for the first buyers found that thru the electrical box and rafters and they backed out. The second buyers ended up getting it for a 8k price reduction because the appraisal came in lower than we thought.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $69,728
Cash invested: $16,000
Sale price: $136,500

3b/1bth 1050sf basement rancher fix and flip. 2nd flip. Still loving it, still learning, still working at the Credit Union part time. Currently looking for more flips and or rentals.

How did you find this deal and how did you negotiate it?

Auction foreclosure.

How did you finance this deal?

Cash.

How did you add value to the deal?

Completed the work myself saving on labor costs and learning more along the way.

What was the outcome?

Great, nearly 40k profit, after realtor fees.

Lessons learned? Challenges?

I was originally concerned with it having only 1 bath and saw potential in adding finished space and a bath in the basement. It would have taken an additional 15k and several more months but not yielded much more ARV. I learned that sometimes leaving some things open for the new owner to put their own vision into is a good thing. He liked the clean but blank space in the basement for his own imagination.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Missy and Blythe Sanders of Stephenson Realty and Auction in the Knoxville and surrounding areas have been great to me and wonderful to work with. Lower commissions and higher results, they have sold my last 2 houses in less than 30 days each. They remain available and connected after the deal. Relationship based realtors.