February 19, 2010

My 1031 Exchange

I finally purchased an investment property to replace the rental house I sold in Dale City. I had it handled as a Section 1031 Exchange for tax purposes, which basically means that taxes on the profits of the first property are deferred, transferred to the new property.

It took months to find the house and go to settlement, mostly because I tried to purchase a townhouse in Stephens City which did not work out. (Dealing with bank-owned property can be frustrating!) Finally I gave up on that one and made an offer on this one which is in Woodstock. The picture on the left shows the rear view of the home and the ones adjoining it. As you can see the first picture (above), the front of the house is brick.

A foreclosure, the house needs some improvements, the most serious being repair to the furnace. It also needs painting and some carpeting. Once those items are completed, we'll put it up for rent. It's a nice house and has two master suites.

It isn't a dream house like the one we found for Frank's 1031 exchange but it was a lot cheaper and should be a good investment long-term. I feel this is a good time to buy property for investment because prices are very low.

No comments: