All Forum Posts by: Sean Connolly

Thank you Natalie! That was my suspicion, but wasn’t positive. I still don’t understand the exact numbers, but I suppose I should find myself another accountant that can!

Hello All, 

Looking for a bit of insight on some future tax issues. I am at the tail end of subdividing my property. I have a duplex, single family home, and a wooded lot ( all on one mortgage), that are now all separate lots. I have owned and lived at the property for 4 out of the last 5 years. I am currently selling the single family and the wooded lot. I will be keeping the duplex. I am curious how taxes/capital gains would work on these sales. I hoped that because it was all "one property" and I have lived at the property long term, that I would not have to pay capital gains, however, I don't expect that happy ending. If anyone has any idea how the taxes on this would work, I'd really appreciate it. I have talked to my accountant briefly on it, and he did not give me a straight answer. Here are the numbers below.

Original mortgage amount was $319,900

Current Mortgage balance is $289,000

Single Family sale is $245,000 minus 5% Agent commission ($12,250) = $232,750

Wooded Lot sale is $90,000 minus 5% Agent commission ($4,500) = $85,500

Thanks for any help/insight given!

Hey Jason,  get ready for a fun ride. I have just about hit the one year mark since I contacted the civil engineer. Everything has been behind schedule. Being this is my first time doing this, it could be normal, or it could be the team I chose. The land has been surveyed. I ended up with a third buildable lot, which was a plus. Lot needed septic approval from town. Then stormwater drainage report. Site plan approval and now waiting on a letter of buildability. In all for me to subdivide. I’m right around 12k in. I wish I could tell you everything turned out great but we’re not there yet! I will keep you posted. If I were to do this again, I would just be expecting everything to be behind schedule and the cost to be more than expected. Good luck. 

Thank you guys for your replies. I did a thorough background check on them and as far as income, they definately qualify and have always paid on time. However, I do not know how they are with saving. We have not talked numbers at all yet, so I think I will just give them an offer in hand, with some comps to back it up and see where it goes. I am not in an incredible rush as the house cashflows well as is.

Hello all,

I own a property with a duplex and single family home on it. I am currently subdividing the houses, as well as a wooded lot, and selling separately. My tenants in the SFH have shown alot of interest in buying the SFH. The comps I have pulled up are averaging around 290,000. I am curious what people think about selling the property to them on my own, or using a realtor. I would obviously rather keep the real estate commission if we both agree not to use realtors, but am concerned about liability. Looking for some insight from those who have structured their own deals before.

My plan was to be blunt, show them the comps and give them a firm offer. If anyone has any insight I would truly appreciate it. Thanks in advance.

It definitely varies from town to town. There have been situations, in my town, where unknowing new homeowners have started large-scale projects that have been stopped in its tracks due to passer-by committee members seeing the work. Some Towns only care about whats visible from the road; some all exterior; some everything down to picking out your countertops. I would seek out the committee in charge, and I'm sure they will be brutally honest about what you can and cannot do. 

Hey Ron, hope all is well. Everything ended up working out okay. The tenant and I came to a mutual agreement. He is paying for Februarys rent, and I will be keeping the security deposit. He told me he was expecting to lose the security deposit. This now gives me the time to find the right tenant and fix my lease agreement so I do not run into trouble in the future.

I am currently relisting the property, and already have a few people interested. I have another tenant in the same property leaving the same month, who gave me plenty of notice, and was trying to avoid multiple vacancies in the middle of winter. That was the whole point of the six month lease. If it didn't work out, it would be prime time to find another rental, and me find another tenant. Regardless of which way this goes, it was a hell of a kick in the ***. Learning from my mistakes and hopefully don't make them again. Thank you all for your opinions.

Thank you John. The security deposit is not my concern. In the lease, there is wording that states security deposit is held for last months rent only. Outside of the security deposit, are you saying that they have no responsibility to live up to the 6 month lease? 

Leon Foree, it states "After 6 month's rental payment has been received, this agreement may be terminated by mutual consent of the parties; or by either party giving written notice at least 30 days prior to the end of any monthly period." 

I know the wording seems strange. That is my dilemma. I wrote in AFTER 6 months rental payment before.