What is the name of your state? Florida
I am currently in home #1, have lived in it as primary res for 4 yrs.
Owe 120,000; Worth 280,000; have HELOC for 140,000
Due to company transfer, am purchasing home #2, and only plan to live there for approx 6 months, then will sell home #2 and move into home #3, which is currently in pre-construction, and live there for 3-5 years. Both will cost approx 400,000 each.
For both homes #2 and #3 would like to do 1st and 2nd mortgage (no PMI) interest only loans (smallest payment possible).
Would like to keep and rent home #1 (for its appreciation) for up to 3 yrs.
Any thoughts on:
(1) when to sell home #1, i.e. sell when I move into #3 so my Section 121 clock starts ticking on #3 asap
(2) should I treat home #2 as an investment and apply 1031 exchange rolling appreciation into #3? If so does this mortgage need to be as investor as opposed to primary residnece? Do I need to keep #2 for a full year in order for this to work?
(3) Use funds from exisiting #1 HELOC and avoid 2nd mortgages on #s 2 and 3 to eliminate additional closing costs? If I use up all the HELOC thus have no profit on #1 when I sell it, does this minimize the Section 121 benefit?
(4) Any other input on ways to maximize profits for this scenario?
Post this in the tax section and tell them we sent you over so you do not get nastygrams about double posting.
I am currently in home #1, have lived in it as primary res for 4 yrs.
Owe 120,000; Worth 280,000; have HELOC for 140,000
Due to company transfer, am purchasing home #2, and only plan to live there for approx 6 months, then will sell home #2 and move into home #3, which is currently in pre-construction, and live there for 3-5 years. Both will cost approx 400,000 each.
For both homes #2 and #3 would like to do 1st and 2nd mortgage (no PMI) interest only loans (smallest payment possible).
Would like to keep and rent home #1 (for its appreciation) for up to 3 yrs.
Any thoughts on:
(1) when to sell home #1, i.e. sell when I move into #3 so my Section 121 clock starts ticking on #3 asap
(2) should I treat home #2 as an investment and apply 1031 exchange rolling appreciation into #3? If so does this mortgage need to be as investor as opposed to primary residnece? Do I need to keep #2 for a full year in order for this to work?
(3) Use funds from exisiting #1 HELOC and avoid 2nd mortgages on #s 2 and 3 to eliminate additional closing costs? If I use up all the HELOC thus have no profit on #1 when I sell it, does this minimize the Section 121 benefit?
(4) Any other input on ways to maximize profits for this scenario?
Post this in the tax section and tell them we sent you over so you do not get nastygrams about double posting.