Need Help With A Property (rent/sell/LO)?? Brooklyn NYC
I just closed on a studio condo in an area that is "up and coming". my monthly expenses are about 800. there are no other new condo developments in this area... mostly brownstones being rehabbed and resold.
I would like to sell this for a gain and do a 1031 exchange onto another new development which i will eventually live in. However, that complex has just laid down its foundation so i dont know when it'd be ready to purchase.
1) one aggressive agent (who closed on a few units in the same building) would rent it for 1000 or advised me that the property was undervalued and probably worth 130k or so. I paid 95k. He gave me a speech about how he could try to sell it for me for 150k and worse to worse have me hold a note. He works for a reputable realtor. #1 or #2 in nyc.
2) the agent who sold me the apt said she'll list it for 900. not as aggressive as i'd like.
3) i thought about renting it out to a college student (or whoever) with a 6 month lease at 900. that gives me 6 months of income to pay for the expenses and free up the property to sell it at that time when the other property is near completion. i am thinking a student b/c they might want a shorter term lease and since i'm not going trhough a broker it'd be no fee for them to pay initially.
if i do 1) then i dont know if the 1031 180-day limit is enough to close on the other property. however, even if i pay tax on a 30+k return after fees and such, that's not a bad deal. 2) is just stupid. 3) i won't get as much income but i can still try to sell it in the summer time for a gain. that six months give me a better cushion for th 1031 exchange.
What would you do in my situation?
Am i incorrect on the 1031 assumptions?
The 1) realtor mentioned a G 1031 which i have not heard of, that will extend the 180-day period to 8 months to a year.
help please!
p.s. what about a L/O? I haven't focused too much on it so i don't know if that's good or not for my situation.
THanks!
Personally I would sell it, not bother with the rental and invest the money in a self directed Real estate IRA. As long as you dont live in the property that you are investing in you will be ok.
Or I would contact the builder and see if you could get a deep discount by paying early on after I sold the place thereby making it a 1031 by investing early.
Good Luck,
Kyle
I'd get the advice of a good 1031 facilitator FIRST, and then make my decisions around that.
The Long Island Investors Group (rei club) just had a 1031 speaker last month who works the NYC area. Her name is Marie Flavin. She is an attorney and the VP of a company called IPX. Based upon what she said she'd be an excellent person to start with. Her phone number is 877-230-1031.
I also just got a link to the audio of her March presentation to the rei club in an email yesterday. Since I cannot directly type it in here just go to the web site for the club (lireia), then type in a front slash and
audioclub/03_2004_audiolinks.html
. If you click on the link you'll be able to hear what she said, too. Good speaker. Great info.
Start there. Good luck.
Jamie
[ Edited by rei_geek on Date 03/24/2004 ]