1031 Exchange

There has been lots of activity on the house we have for sale, but no buyer yet.

We're expecting lots of folks in for the Memorial Day weekend and hopefully some showings will take place. With school out in this area and just about out in other areas people should start looking to move.

I was speaking with my brother in law while we were away. We'd pretty much decided that to pay off some debt from the remodeling of this house we would not be able to do a 1031 exchange and we'd end up paying some extra on taxes.

However, my brilliant brother in law gave us a simple idea. We should still be able to go ahead and do a 1031 exchange. Instead of cashing out on this sale (if we get one) we'll just exchange and move up. Once that transaction is completed we can pull some equity from the new house to pay off the debt. The monthly rent paid by the tenant int he new exchanged house would help pay it off. I think this can work!

In rental news. The tenants in A will need to be out by July 1. We're going to be remodeling that unit. I have encouraged these folks to buy a house. They would be perfect home owners. There is a great fixer upper for sale just around the corner priced at $69,900. It even has room for a hot tub. If we were in a position to buy we would consider it ion a heart beat.

I know these tenants have wanted to buy a house so this would be a great opportunity to do just that. There monthly mortgage would be around $500 which is just a little more than they have been paying for rent. Since they are first time home buyers they wouldn't need any money down if they qualify for an FHA loan.

This situation could be turned into a blessing for them. I hope it does.