You Want Excellent Chinese Food, Manch?


#483

We signed a contract over the weekend… we have a lot of work to do


#485

Congrats! Your wife must be excited :slight_smile:


#486

We both liked the potential of the home because of the unique design which features an open patio area in the mid frontal part of the home. The family room is massive with heated floors. This is a ranch style home that has two master suites where one can be an law unit if you want it to be. There is plenty of yard to put another separate guest house. My strategy to have realtors looking for me in exchange for a listing played out better than I thought. So when people say they can’t find something in a market like this, I say you ain’t trying hard enough or not thinking out of the box.


#487

House warming for all bloggers in this forum? No excuses, house warming is good fortune :man_dancing:

Less talked about reason is for when you two have a fight.


#488

I will bring you red pocket with $8.88 inside.


#489

Unfortunately since I am doing an exchange of a rental, any house warming for me will be most likely in two years when we invade the house.


#490

where did u buy? congrat


#491

East of 35 and above 280. House is over 2K sq ft and lot is over a half acre. Technically we are in contract with the seller Ok’ing exchange deal but we still have housing inspection to do and more on my side in Oakland. But, yesterday I deposited the mandatory 3% deposit so that is another major step done.


Millbrae Rocking The Overbids!
#492

So what is your interpretation of the 1031 conversion rule?
Two years to date. Or you just need to collect rent in 2018 and 2019…meaning theoretically could move in
in say June of 2019


#493

Well, I need to talk to my IRS buddy who does my taxes for a clear game plan and have him maybe give me clear instructions. We obviously are using a reputable 1031 exchange intermediary who I will certainly lean on for information too. Initially, I think 2 years minimum renting out is “more than enough” and then we will take it over with remodeling it first the kitchen which is original and then move in shortly after. More probably like mid to late 2020.


#494

I think the scenario I mentioned is legal. But you are still on the hook for the current gain if you sell the new house.
As long as you are cash positive for the during rental period, it’s a good strategy. Heavy negative cash flow could be painful…

Another strategy is to buy as an LLC and rent from yourself…Then you can move in right away…definitely need IRS approval and you loose the $500k tax freeby…But wealthy guys I know that have several homes use this strategy…

I personally think the $500k tax free by is in jeopardy, especially if the Demcrats win in November.

Then it would make sense for everyone to houses in an LLC and rent back…That way all your expenses are deductible from your Fed taxes…No $10k limit


#495

Yes, thanks to Congress for not changing the current 2 out of 5 years rule to the proposed 5 out of 8 years nonsense. Nope, my work is not changing until late 2019 anyway so no hurry. I will do everything by the 1031 exchange book since the capital gain penalty otherwise would be horrendous. Yeah, frankly could care less if I make any money on the new house if I say sell after the min stay but we should since we paid a fair price. I think the hard part, well, it may be easy if we really like it out there would be what to do with the Sunset home since the clock would also be ticking on my 500K exclusion there. If we continue to rent it out after we head for San Bruno for too long don’t we have to re-establish the 2 out of 5 years again?


#496

Sell the Sunset house. It will be worth $3m in 2020, and retire


#497

Why not rent out the sunset house instead of selling it? 5K - 6K per month, and it will be characterized as passthrough income - favorable tax treatment. As well, prop 13 keeps your tax base low.


#498

Elt1 - is there any benefit to buying as an LLC and renting it from yourself if the house is purchased without a loan?


#499

And that is more and more likely the plan to sell assuming we like San Bruno enough. You know, once we sell the Sunset home we will never get it back. It is too prime of a location, being a block over from Safeway and all those restaurants. We sell, take the money home to Chinatown and make the family building one that our ancestors would be pride of. Full modern with elevator and roof deck.


#500

I think so, Talk to your CPA. If you own multiple properties and it’s your primary business, it can be treated as a business property but will need a non owner occupied loan, Rate may be a little higher


#501

Correct, that is the dilemma if you will as to what to do. We will cross that bridge when we get there, but we can’t think too long right or it reverts to a full rental house, right?


#502

Yes. TAKE the $500k as often as you can. It won’t be around forever


#503

Does the 500k exception apply to state income tax as well? I hope California lawmakers won’t remove it