All Forum Posts by: Richard Smith

@Bill Exeter 

It is a Brooklyn, NY brownstone.  Single entrance to the building into a common area entryway with separate entrances to my unit just inside and the rental unit up a stairway from there.  Units are roughly the same size.  Both 2 floors, approx. 1500 sq. ft. per unit.  Owner unit is basement (as defined by NYC Housing regulations) and 1st floor and is 2 bed 1 1/2 bath, rental is 2nd and 3rd floor, 3 bed, 3 bath.

It is a legal 2 family as shown on NYC ACRIS system, so I think it would qualify as what you have termed as split use, so from my original example, lets keep it simple and say:

1. 500k current mortgage AND original purchase price, just to keep these simple

2. sell for 1.5M = 1M profit (less closing costs, agent commission, and other fees, but again, keep it simple)

Could I take 500k cash out on the 121 exclusion, then put the other 500k + new 500k mortgage into the 1031?

Also, assuming the answer to the above to be yes, could the 500k cash + 500k new mortgage be split into multiple properties for the 1031?  For example:

100k + 100k mortgage for one single family rental house

2 x 200k + 200k mortgages for 2 duplexes

Thanks, @Bill Exeter 

My home is 2 family.  I live in 1 unit and rent out the other.  Is it still only under the 121 exclusion and not qualified for 1031?

I have a similar question. Let's say I purchased for 500k, standard mortgage. I sell for 1.5M. IRS allows up to 500k for married couples on sale of residence. Is there any way to structure the 1031 exchange such that I can keep the first 500k profit out of it and only apply the 2nd 500k to the exchange? I read something somewhere that a partial exchange was possible but it was not clear how that works and made no reference to the standard IRS 500k allowance

Hi BP community!

I'm new to BP and, at least in terms of real knowledge, new to real estate investing. That said, my wife and I have done pretty well for ourselves stumbling into REI just as home buyers. My first house was bought in the Inland Empire area of SoCal in 2001. We sold 3 years later and walked away with over 100k in profit. Moved to Brooklyn NY and after pissing away that profit because we didn't really know how true REI works and didn't think we could afford to invest in the local market at the time, we finally bought our second home, a two-family brownstone, in 2011. We are currently strongly considering relocating again and 4 years later, based on the current market, have at least 500k equity, so stand to make a significant profit again. This time I don't want to make the same mistake of letting the money slip though our fingers with nothing to show for it, so have been reading up on the BP blog posts, forums and listening to the podcast. My goal is to by my own next home free and clear, then turn the rest of the profits from this sale into a buy and hold rental business that will allow total financial freedom w/in the next couple of years. I'm not averse to flipping houses, and have a strong background in remodeling/construction, but I'm really looking for short and long term passive income. Some great info here and I've got a bunch of questions which I'll post shortly to the appropriate topic areas.

This looks like a great REI community and I look forward to picking your collective brain!

David,

As a car guy, I'd say that even not running, if it's a mid-70s era two door and the body is in good shape, you could probably still get a couple thousand for it if you post somewhere like classiccars.com.  The Century was the Indy Pace Car in 75 and 76, so if it's one of those years, it may have a higher collectable value for someone wanting to do a restoration on it.