The 45-day countdown: Day 1

We sold our rental property in California yesterday (yay)!  Rather than taking the money and going on wild spending spree, or trip around the world, we’re going to put it all back into rental property. This seems the prudent thing to do in order to help fund retirement. It also postpones taxes by rolling the money into replacement property. This is similar to rolling over other types of funds. The money never goes into your account, so it stays invested. It’s called a 1031 exchange.

One of the rules of the exchange is we have 45 days to identify new property. We’re buying 2, and luckily we’ve already identified the first one. So we only need to worry about finding the other one. This simplifies things considerably – I was worried about trying to buy two at once! I feel under a lot of pressure to do this right.  We’ve made mistakes buying property in the past, and I want to choose wisely.

 

They always look so much better in the photos than in real life!

Now let’s play “House Hunters!”

House #1

House #1 is an older 1-story, 3-bedroom.

(uh, no, the metal buffalo doesn’t come with the house)

  • Pros – Across the street from a park, pretty backyard
  • Cons – funky layout, needs updating inside, I don’t like the street name, and the listing price is over our budget.

Now you’re wondering what the street name is. It’s Admiral Emerson. It just doesn’t sound very homey to me.

House #2

House #2 is a 2-story, 4-bedroom on a small lot, in one of those newer subdivisions with tall skinny houses right next to each other.

  • Pros – 4-bedroom, nice inside, doesn’t need any work, should rent quickly
  • Cons – It feels like a townhome inside, even though it’s not. Also, it’s right next to the mailboxes for the neighborhood, so lots of people are stopping on the street in front of the house to get their mail, oh, and, it’s over our budget.

House #3

I haven’t seen this one yet, it just came on the market this afternoon.  So it could be a lot worse in person than it looks online.  But it sure looks pretty from the picture!

I think this one will sell fast.

  • Pros: Great curb appeal
  • Cons: There’s a hot tub in the backyard, which I’d love if it were for me, but I’m worried about liability for a rental. It’s also listed at a bit over our budget, but not by as much as Houses 1 & 2.