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About to get somewhat large amount of money and would like advice my current plans for it

Posted on 4/19/23 at 3:34 pm
Posted by BullredsRus
Baton Rouge
Member since Aug 2007
754 posts
Posted on 4/19/23 at 3:34 pm
Whether it’s actually a large amount is debatable but it will be biggest check I’ve even held. I am Selling some real estate. I don’t have a mortgage on it, so all proceeds at sale will be given to me via check at closing. Total amount is $570,000

My current opinion is I have a few options.

1. Put it into a 1031 exchange and buy something bigger to defer the tax hit. Somewhat skeptical here bc I am tired of being a landlord. If I do this it will def be set up and managed through a RE management company so I will be a lot more hands off then what I am selling now. This keeps some cash flow coming in every month via a passive Real estate business which I am already used to.

2. Take the money, pay the capital gains on the profit, and whatever is left over (will be over 500K left after taxes) use that to pay my house off. My note on principal and interest is $2,000 a month and I owe just over 400K on home so will be house note free. My interest rate on my home is 2.75 and I have about 27 years or so left on term if I don’t make any extra payments for what it’s worth when considering this option.

3. Invest in something super safe like a CD or Bonds and take advantage of the higher interest rates while they’re here and use that interest income to pay my house note instead of just paying it off. That way I keep nest egg there and if interest rates ever drop I can take it out and still pay off the house but just owe less and be able to keep more of the money after it’s paid off.

I’m open to other options. TIA for any feedback here.
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