Considering several options and would appreciate guidance from those who have more knowledge than me (which is probably everyone who is active on this board). TIA!

• Bite the bullet and pay the capital gains and put money into something safe with moderate yield
• Re-invest into another rental property (or possibly two where the profits from one pays the mortgage of the other)
• Buy something where we'd like to vacation or retire and VRBO
• Put it in with the rest of our investment accounts
• Wildcard--something I haven't even thought about

Only kicker for rental or VRBO is that I want to get out of the management part so would have to rely on management company.

How much money are we talking here?

I'm looking at doing a variant of bullet #3 when I eventually sell mine (I have great tenants on a long term deal right now, but once they're gone I'm selling).

I'm not a huge fan of doing VRBO, etc. Ideally I'd like to find a place in a scenic college town that has cool summers… rent the place out during the school year and then move there in the summer. My wife is on an academic calendar and I work 100% remote so this kind of situation would work for us but wouldn't fit most folks.

Captain Winky said:

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How much money are we talking here?

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Around $300K

Is that 300k your taxable number or just what you netted including return of capital ?(which is not taxable in your first option)

If you're looking to do #2, look at a 1031 exchange but there is a pretty tight window to execute.

That is what I would do.

We just did the same. We decided to buy a vacation house that we know we can rent at a solid cap rate and the remaining funds were using as a down payment on raw land to eventually develop into our retirement homestead. The plan is to use a portion of the rental proceeds to pay down the note on the land. We're doing the rental through my company which is a full service rental management company to help mitigate maintenance and upkeep as they eat a portion of the costs as long as the home stays active in the rental pool.

I'm confused, how does only bullet #1 involve paying capital gains taxes?

Jay@AgsReward.com said:

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Is that 300k your taxable number or just what you netted including return of capital ?(which is not taxable in your first option)

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It's the latter, thanks!

500,000ags said:

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I'm confused, how does only bullet #1 involve paying capital gains taxes?

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Fair question and I probably should have organized my bullets better. My limited understanding is that we can defer the CG taxes if we re-invest in real estate (with some limitations). For any other investment, we'd pay CG within 6 months of the sale.

I think your 1031 ship has sailed, last time i was looking into it you had to have the reinvestment property identified (or a number of potential ones, but must include the one you end up with) before selling (edit: see below)

We were in a similar situation as you about 18 months ago. The cap gain on the property was around $400,000. We went the 1031 Exchange route and bought a couple of townhouses, which we rent.

Also, you only have 45 days after you close on the property to identify a replacement property/properties...and then you have to close on it/them in 180 days.

ToddyHill said:

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Also, you only have 45 days after you close on the property to identify a replacement property/properties...and then you have to close on it/them in 180 days.

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Pretty sure you can't take receipt of the funds yourself but they have to go to a Qualified Intermediary (QI).

Good luck.

Excellent point Aggiewes.

One can't take possession of the funds in a 1031 Exchange. They have to go to a third party, which will then disperse the funds to the sellers of the property one is acquiring. In our case, I think their fee was $1500.

Appreciate all the information about the 1031 exchange. We looked into trying to get it done today (closing is actually this afternoon) but have decided against it. I don't think we'll be ready to pull the trigger within 45 days and I don't want to rush into a bad decision.

So moving on from that, curious to hear what people think about investment options. Thanks again!

You can get a really nice boat with that kind of skrila. Or just skip straight to the h&b

Has anyone done any of the 1031 Exchange eligible funds where you buy a portion of a larger RE Asset or portfolio?

Do you have any improvements to reduce your cost basis?

Stat Monitor Repairman said:

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Do you have any improvements to reduce your cost basis?

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No improvements but our accountant said that he can reduce it some with some depreciation.

Your accountant should have it covered but beware of depreciation recapture that comes with the rental sale.

Would you be interested in doing loans on land in the 10% to 12% range?