Purchase price: $516,000 Cash invested: $600,000 Converted mixed-use 3 residential and large commercial space into 5 residential units and one mixed-use Building.

@Frankie Lotrec if you have an existing loan on the property and you plan to legally convert from a 4 unit to 5 unit , you should check the loan documents because you’d essentially be converting it to a commercial property, since 5+ units is considered commercial and subject to different appraisal approaches and so it would rule out the property being considered for purchasers utilizing residential financing.  

You are converting their tax free gain in to a taxable gain.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $380,000

Cash invested: $135,000

Annual rental to be turned into STR when tenant vacates

What made you in...

Recently, I conducted a cost segregation study on the property shortly after converting to a STR (converted June 1 2024), and I want to ensure I file my taxes correctly and legally given this change in circumstances.

One property is not furnished and has an unfinished basement that we'll eventually be converting. 

Does it need to be converted back in to a rental after your 2 years to qualify for a 1031?

Does someone have experience buying a foreclosed property and keeping the existing person/family living there and converting to a tenant? 

Also of note, you can convert your current home, with a VA mortgage, into a rental property and buy another primary with your 2nd tier or bonus entitlement depending on how much your current VA loan is. 

Seeking insight from the community on converting a STR (primarily Airbnb) to long-term rental.