buying my first investment property

Im a new kid on the block and looking to purchase my first investment property. A woman I know said she owns a house, and she rents it out to a bunch of drunks and wishes she could sell it. When I asked why doesn’t she her reply was “my accountant said I’d have to pay capital gains since I only lived there 1 year and I dont know if I ever want to move back” I know this is a oportunity but I cant see anyway of her getting around the capital gains. I fiquired I would offer her about 15% under assesed value…any ideas or suggestions I would certainly appreciate!!..gymjim

Howdy Gymjim:

Glad you joined the club. Ask her to owner finance. It would be considered an installment sale and she would pay capital gains tax a little at a time instead of all at once.

Another idea if you pay cash is her to do a 1031 exchange where she can postpone the tax if she trades up or at least equal in debt and equity. She has 45 days from the close of the sale to identify a new property and 180 days to actually close the new sale. She would need to hire a 3rd party that is familiar with 1031’s but it is not that difficult or expensive. It can be done for about $400 to $500 extra costs.

Hope this gives you a few ideas LOL

Thanks so muchTed, I will relay this info & see see if she’s readfy to sell…