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Will move in next 2 years, tons of equity, 3.00% note, best way to capitalize?
Posted on 6/9/23 at 11:01 am
Posted on 6/9/23 at 11:01 am
I'm thinking the answer is to sell, we bought a home in Mandeville during the pandemic and our note started at $200k @ 3.00%. I have done a lot of improvements and it will probably be worth $380-400k when we need to sell in 24(purchase price $273k).
I don't want to pay capital gains on the equity of course, but it kills me to get rid of a 3.00% loan. I can find out if the loan is assumable to help market it, but how many people will have the money for a $400k house and have to come up with $220k in cash?
Is there any other avenue to keep the home and rent without being taxed on the gains?
I don't want to pay capital gains on the equity of course, but it kills me to get rid of a 3.00% loan. I can find out if the loan is assumable to help market it, but how many people will have the money for a $400k house and have to come up with $220k in cash?
Is there any other avenue to keep the home and rent without being taxed on the gains?
4
Posted on 6/9/23 at 11:10 am to PistolPete45
You will not pay capital gain taxes on a sale if this was your primary residence for 2 out of the last 5 years. You could rent it for a few years and keep your 3% mortgage. If you rent it long-term, you will lose the ability to have a tax-free sale.
Posted on 6/9/23 at 11:47 am to PistolPete45
I think only FHA and VA loans are assumable; have one of those?
What could you rent for? Probably could cashflow ~1K a month if you want the hassle of dealing with renters
What could you rent for? Probably could cashflow ~1K a month if you want the hassle of dealing with renters
Posted on 6/9/23 at 11:04 pm to tigerrocket
I thought if you rent it for more than 5 years you can become eligible for a 1031 in kind exchange?
Posted on 6/12/23 at 8:59 am to PistolPete45
Pretty sure you only pay capital gains on anything above $250k increases in value.
I sold my place when we moved to Charleston and now we’re just renting waiting on the market correction.
I sold my place when we moved to Charleston and now we’re just renting waiting on the market correction.
This post was edited on 6/12/23 at 9:01 am
Posted on 6/12/23 at 9:07 am to Chucktown_Badger
Got to live in for 2 of last 5 years for that to be true.
Guess I'll have to sell.
I have a traditional loan, I'll have to call Wells Fargo to see if it's assumable.
Guess I'll have to sell.
I have a traditional loan, I'll have to call Wells Fargo to see if it's assumable.
Posted on 6/12/23 at 10:35 am to Chucktown_Badger
quote:
now we’re just renting waiting on the market correction.
You may be renting for the rest of your life
Posted on 6/12/23 at 1:13 pm to Motownsix
You would only want to do a 1031 if you aren't eligible to sell it tax-free under the primary residence rule. If you do a 1031, you will not be selling it tax-free, just tax-deferred. You would also have to purchase a like property at a price at least as high as the one you sold.
Posted on 6/12/23 at 9:06 pm to PistolPete45
On the bright side you house is in Mandeville, it won't last even a month on the market before it gets snapped up.
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