Fantastic stuff, guys. I sold a rental in Florida about 10 months ago for $300K and could have moved it into like-kind properties, but I used the profits to pay off all the mortgages on my other rentals. And while that was a sound decision, the closing costs, capital gains and depreciation recapture put a slight dent in my profit for sure. But it's great to have this info in my pocket for future sales. WIth the market being so crazy and demand exceeding supply by probably 3-to-1, man, you'd REALLY need to have your financial ducks lined up before attempting a 1031, because houses in most larger markets are going under contract in hours. Ali, you should sell one of your buy-and-hold properties, have Scott serve as the intermediary, and roll it into a bigger property. You could do a series of documentary, sequential vids and explain the roadblocks and expenses you encountered. Better yet, you could probably write off the expenses because you used the sale as a means of providing content for your TH-cam business. Double win??
well that almost sounds like a good idea, except my properties are so profitable (most bought during the crash) that I'd be doing all that to only end up with a way less profitable replacement property. So, nooo 😊 But I'm with you, my only worry for people right now would be securing the replacement property since properties are so tough to grab right now. But planning ahead and lining up 3, having a solid buying channel...it could definitely still work. What was your motivation for paying off all your rentals vs buying more with the cash instead?
@@AliBooneInvest Come on, Boonie, take one for the team and sell a house! You can move from SoCal to Tulsa to cut costs.... Re your question: I'd rather own my five SFH rentals outright than owe 10 of them with mortgage loans on all of them. Yeah, I know, it's not the best leveraging of the money, but I accrue cash much faster this way. The monthly cash flow is great now that the loans are satisfied. I know some people want to own as many doors as possible and let the tenants pay the mortgage, but if you're clearing $300 per month in cash flow from each, and the HVAC blows (which happens every few years here in Florida), your profit margin for that home is zero for the year. I also got started later in life than many investors, and I don't want to owe any mortgage money in retirement, which is maybe 10 years down the road. If I had started when I was a few years younger, I'd probably have used the proceeds from selling the $300K rental house to buy a half-dozen others. But whether it's "good debt" or not from a growth standpoint, I still don't like owing money. Also, would you rather deal with 10 tenants, or five? All told, it's just the way I'm wired. Old-skool mentality, for sure.
my philosophy is--everyone should do what lets them sleep the best at night! No matter the returns, no investment is worth losing 💤 💤. And noooooope, that would be a really dumb move on my part. One swanky TH-cam video won't even nearly pay what I'd be losing to do that. Not even close. Lol
Fantastic stuff, guys. I sold a rental in Florida about 10 months ago for $300K and could have moved it into like-kind properties, but I used the profits to pay off all the mortgages on my other rentals. And while that was a sound decision, the closing costs, capital gains and depreciation recapture put a slight dent in my profit for sure. But it's great to have this info in my pocket for future sales. WIth the market being so crazy and demand exceeding supply by probably 3-to-1, man, you'd REALLY need to have your financial ducks lined up before attempting a 1031, because houses in most larger markets are going under contract in hours. Ali, you should sell one of your buy-and-hold properties, have Scott serve as the intermediary, and roll it into a bigger property. You could do a series of documentary, sequential vids and explain the roadblocks and expenses you encountered. Better yet, you could probably write off the expenses because you used the sale as a means of providing content for your TH-cam business. Double win??
well that almost sounds like a good idea, except my properties are so profitable (most bought during the crash) that I'd be doing all that to only end up with a way less profitable replacement property. So, nooo 😊 But I'm with you, my only worry for people right now would be securing the replacement property since properties are so tough to grab right now. But planning ahead and lining up 3, having a solid buying channel...it could definitely still work. What was your motivation for paying off all your rentals vs buying more with the cash instead?
@@AliBooneInvest Come on, Boonie, take one for the team and sell a house! You can move from SoCal to Tulsa to cut costs.... Re your question: I'd rather own my five SFH rentals outright than owe 10 of them with mortgage loans on all of them. Yeah, I know, it's not the best leveraging of the money, but I accrue cash much faster this way. The monthly cash flow is great now that the loans are satisfied. I know some people want to own as many doors as possible and let the tenants pay the mortgage, but if you're clearing $300 per month in cash flow from each, and the HVAC blows (which happens every few years here in Florida), your profit margin for that home is zero for the year. I also got started later in life than many investors, and I don't want to owe any mortgage money in retirement, which is maybe 10 years down the road. If I had started when I was a few years younger, I'd probably have used the proceeds from selling the $300K rental house to buy a half-dozen others. But whether it's "good debt" or not from a growth standpoint, I still don't like owing money. Also, would you rather deal with 10 tenants, or five? All told, it's just the way I'm wired. Old-skool mentality, for sure.
my philosophy is--everyone should do what lets them sleep the best at night! No matter the returns, no investment is worth losing 💤 💤. And noooooope, that would be a really dumb move on my part. One swanky TH-cam video won't even nearly pay what I'd be losing to do that. Not even close. Lol