John T. Reed’s news blog

A REDDIT real estate investing member posted this:. I bought a principal residence in 2016 for about $300k. Now worth about $500k, and has a tenant. My understanding is that I can avoid capital gains on up to $250k if I've lived in the house for 3 of the past 5 years.  Of course, I have a 2.25% mortgage I don't want to lose. My plan is to create an LLC, contribute $200k to the LLC, and then buy the house for the fair market value of $500k. I would transfer the title through a closing attorney. I would continue...

Assuming a low-interest mortgage. Is that a good idea? .There is no advantage to a home buyer to taking over an existing low-interest mortgage. Why not? The house will sell for a higher price if it has a low-interest mortgage. So what you don’t pay interest you WILL pay in a bigger down payment and a higher price than if the home did NOT have a low-interest mortgage. It all comes out in the wash.. Is there an advantage for the seller of such a house to a buyer who assumes the low interest mortgage? Yes. Now I read that...

I found a REDDIT question from a real estate investor that could help my readers. But bought a row house in Philly fixed it up and sold it. But the title company won’t provide title insurance claiming the prior seller was not the owner and that there are $33,000 in unpaid property taxes. He says his purchase settlement statement said $31,500 of the sale proceeds was going to pay off that much delinquent property taxes. . Generally, if you get title insurance when you buy, they are guaranteeing that the seller is the seller. But the policy limit would not...

There has been a settlement in the lawsuit against the National Association of Realtors® and a number of large brokerages. This is being touted as a great change and lower commissions. . I will believe it when I see it. Here is what needs to happen. . A start-up will come into being offering low commissions like a flat rate of $3,000 for all homes regardless of the sale price. And that start-up will succeed and get competitors offering similarly low fees. . Crown Books, which was started by one of my Harvard Business School classmates, is an example. Their...

Here is a question I saw on the REDDIT real estate investment group. . “Do you think the like-kind exchange will survive, or is its downfall inevitable?” . Tax-free exchanges are authorized by 26 USC §1031, also known as §1031 of the Internal Revenue Code. Roughly, it says if you trade a business or investment real property for another business or investment real property, you are not required to pay the capital gains tax on the property you are getting rid of. Most such transactions are three-way trades, not two-way. One way is Joe wants my rental house. I want...