which property to pay off
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which property to pay off (by sam [TX]) Nov 30, 2023 7:10 PM
       which property to pay off (by Richard [MI]) Nov 30, 2023 8:05 PM
       which property to pay off (by David [MO]) Nov 30, 2023 8:29 PM
       which property to pay off (by Robert J [CA]) Dec 1, 2023 1:18 AM
       which property to pay off (by BRAD 20,000 [IN]) Dec 1, 2023 1:24 AM
       which property to pay off (by zero [IN]) Dec 1, 2023 7:10 AM
       which property to pay off (by Jim in O C [CA]) Dec 1, 2023 7:33 AM
       which property to pay off (by Barb [MO]) Dec 1, 2023 10:14 AM
       which property to pay off (by Ray-N-Pa [PA]) Dec 1, 2023 12:08 PM
       which property to pay off (by Homer [TX]) Dec 1, 2023 1:50 PM
       which property to pay off (by zero [IN]) Dec 1, 2023 5:10 PM
       which property to pay off (by MikeA [TX]) Dec 1, 2023 5:40 PM


which property to pay off (by sam [TX]) Posted on: Nov 30, 2023 7:10 PM
Message:

I have 59,000 after selling my first rental. I was planning on doing a 1031 but now I am considering paying off a rental and buying another rental from those funds.The amount I sold the rental for would make it difficult to do a 1031 so now I am considering pay off another rental. My choices are paying off a rental that I owe 45,000 with a value of 85,000 or a rental that I owe 41,000 with a value of 60,000. It makes sense to pay the extra 4,000 for the 40,000 grand in equity, compared to 41,000 for only 19,000 in equity. The difference in monthly cash flow is 100 if i pay off the 45,000 instead of the 41,000. My concern is that if I pay off the 45,000 I might not have enough for the down payment of my next rental. If i pay off the 41,000 I will have enough for my next rental. I also have some credit card debt of 15,000 I might also consider paying off but I would rather pay off an asset. Any advice or suggestions would be appreciated. --35.146.xx.xx




which property to pay off (by Richard [MI]) Posted on: Nov 30, 2023 8:05 PM
Message:

Some ideas: 1. Pay off the credit cards in full (higher interest). Then pay the balance against the lower 41K amount.

2. You can probably borrow against the 41K property with a heloc if you need to.

3. When you do find another rental to buy, negotiate more favorable terms (a lower cash downpayment) by possibly offering a higher interest on a second mortgage (a couple points higher but way less than a credit card).

Also, if prices drop as many people expect due to high interest on first mortgages, you might not need a second mortgage at all. --75.7.xx.xx




which property to pay off (by David [MO]) Posted on: Nov 30, 2023 8:29 PM
Message:

Agree, with Richard about paying off credit card. That can be over 20% interest.

What interest rates do you have on the two existing mortgages? --199.200.xx.xxx




which property to pay off (by Robert J [CA]) Posted on: Dec 1, 2023 1:18 AM
Message:

There was Jerry, Morrie and me (Robert).

Jerry never sold, just refinanced a SFR and with the money he pulled out, purchased another home. In 15 years he had 32 homes.

Morrie would sell a home then 1031 into two homes. He ended up with 9 to 11 homes in those 15 years. He would not disclose all of the transactions because he gave 2 homes to his children.

I on the other hand would sell a home and do a 1031 into another home or small apartment property. In those 15 years I was left with 7 homes and 4 apartment buildings with those initial investments.

Jerry was the winner, I came in second and Morrie was last.

But Morrie purchased property near to the airport and 30 years later sold it for over 30M. Jerry sold one home every couple of years giving financing to the new buyers. He had a great retirement. --47.155.xx.xxx




which property to pay off (by BRAD 20,000 [IN]) Posted on: Dec 1, 2023 1:24 AM
Message:

Sam,

Did you already close on your sale? If you did not register it with a 1031 custodian it's too late for a 1031.

Is this $59K before or after income taxes?

Me? Sell on a 1031 and use the money to buy another, TAX FREE!

BRAD

--73.103.xxx.xxx




which property to pay off (by zero [IN]) Posted on: Dec 1, 2023 7:10 AM
Message:

We just closed on a place this week. I took the money and put it in a 8 month certificate at 5.5%. As long as I keep it in for 60 days I won't lose any principle. Figured I wasn't looking for anything while working the rehab.

Still have money from when I did the cash out last year. If a boomer deal shows up and I need the money from the certificate I will lose the principle and do the deal.

I do not see that happening.

With rates being in the 8's I don't want to refi anything right now. My smaller loans are in the upper 3's so I am making a little on paper this way. --107.147.xx.xxx




which property to pay off (by Jim in O C [CA]) Posted on: Dec 1, 2023 7:33 AM
Message:

Pay off the higher interest rate items first. That way you will have more money to pay off the other items. --99.23.xxx.x




which property to pay off (by Barb [MO]) Posted on: Dec 1, 2023 10:14 AM
Message:

If you sold without registering and preparing for a 1031 exchange before selling, then donít do ANYTHING with the proceeds of the house until you speak with your tax preparer. Remember, when selling, you have capital gains and depreciation recapture to pay. Those can be kicked down the road with a 1032, but it all has to have the right paperwork to do that.

So, if youíve not already prepared for a 1031, then take the proceeds of your sale and place them in a CD until after you do your 2023 taxes. THEN you can decide what to do with the proceeds. --149.76.xxx.xx




which property to pay off (by Ray-N-Pa [PA]) Posted on: Dec 1, 2023 12:08 PM
Message:

I don't mind taking on debt from the bank or via sub2. If I take out a loan from a bank, say its $100,000 - Within a month after getting that loan I pay down the loan $25,000-50,000.

So why do I get a bigger loan and immediately pay it down instead just getting a $50,000 or $75,000 loan out the gate?

Well ask yourself where in the life of the loan does the bank make most of its money? It tends to be with the pay down of that first 25-50% of the loan.

So without knowing where you are with your two notes, I can't tell you if that applies or not.

The advise about the higher interest rate cards is GOLD in your pocket. If you can do the 1031, pay cash for a place you can always get a cash out loan or HELOC later. --24.101.xxx.xxx




which property to pay off (by Homer [TX]) Posted on: Dec 1, 2023 1:50 PM
Message:

Pay off the high interest rate credit cards. Take the rest to bank OZK and buy a 13 month cd at 5.6 percent. I am avoiding paying off a few mortgages left over with rates below 5 percent. Iíve done the math and I am much better off doing CDs --66.169.xxx.xxx




which property to pay off (by zero [IN]) Posted on: Dec 1, 2023 5:10 PM
Message:

I'm with you Homer. That's why I dumped some funds into an 8 month version. It pays more than my cheapest loans. It was only 20k so nothing to really get excited over.

Maybe I need to look into Ray's payoff thoughts. How would dumping 20k into an existing loan help with the monthly payment tho? Fixed 30 year loans that I got last year.

Wouldn't the payments stay the same unless I refinanced it? --107.147.xx.xxx




which property to pay off (by MikeA [TX]) Posted on: Dec 1, 2023 5:40 PM
Message:

Before you redeploy that $59,000 you better get your CPA to estimate your tax bill. You could easily lose tens of thousands of that come April 15th. The tax man doesn't like IOU's. You may be kicking yourself for not doing a 1031 when you see how much Uncle Sam is going to extract.

--209.205.xxx.xx





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