Newbie Investor Needs Advice. 1031/Taves/Financing
Good day everyone,
Before I found out that I was going to be unemployed I was under contract to sell a new construction condo located in New York City that I purchased in my name on 6/30/04. Proceeds from the sale will be approximately $189,000. On 12/16/03 I sold a co-op and claimed the profits as a primary residence, to exempt me from capital gains. I currently own a co-op worth $130,000 and another $50,000 that I will be selling; they are both free and clear.
Due to a merger I will be laid off with an enhanced package and will be able to collect unemployment. My employment will end this month, October 31st 2004. Is it possible to claim hardship due to unemployment to avoid capital gains under this situation? I have some money in a 401k worth $28k after taxes, penalty and loan. I am also considering a 1031 exchange to purchase a multi family, but I have only had the property for about five months (5).
I have committed to a pre construction two family house that should be completed in the summer of 2005 and am considering committing to a pre construction three family house within the next few days that will also be completed in the summer 2005, and another condo/hotel located in Miami that will be completed in 2006. I will be borrowing the money for the down payment of the three family and the Miami property from my credit card temporarily until I sell my co-op. If not I will loose the opportunity to purchase pre construction. Does it make since to use credit cards for this type of commitment?
Today, I’m considering getting out of my contract to sell my condo and do a 1031 exchange in 2005 for the purchase of the two and three family homes and selling my co-op to payoff my debt for the down payments. Are there any others options that I can use for my investments?
I currently have great credit, so how hard will it be to get future financing without employment?
Any advice would be greatly appreciated.[ Edited by willia2521 on Date 10/19/2004 ]
Here's a link to the company I use for 1031 exchanges. There is a lot of good information on their website:
http://www.ipx1031.com/etopics.html
For exchanges, you do not have to hold a property for so long before exchanging it. I have bought and exchanged within 2 months personally.
I am not sure about the hardship claim with IRA. I will dfer that question to another board member
I would like to suggest getting a self-directed IRA. You will find you have greater access to your money.
Look at:
www.trustetc.com
Good Luck!
I strongly disagree with 64Ford regarding the length of time that investors need to HOLD property in order to qualify for 1031 exchange treatment. Here is a link to an article that explains the issues. You should be very careful if you are exchanging properties that have only been held for two months. http://comm.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=572&mode=thread&order=1&thold=-1.
I think this will answer alot of your questions.
[addsig]
Mr. Exeter is an expert on this topic, so I defer to him.
Nevertheless, I have completed exchanges on property held very short term without issue.