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As stated you can exempt 500k for married couple from capital gains on a primary home. I did this strategy. I stretched to buy that 2nd home. The seller let me short term seller finance. It was like 6%, 3 years, $1,000 a month, 20% down, balloon payment at the 3 year mark. I sold the primary home at year 2 and paid him off. He even let me stay a weekend at the place before signing the contract. I love working directly with sellers. My net worth has gone up substantially without a mortgage.
No, seller was super desperate to sell. Home had been broken into, door kicked in. He hadn’t used the house for 3 years. He was just really flexible. He did a 3 year loan, not using an amortization schedule. Just a straight 6% on the balance. He asked what I could afford per month, I said $1,000. It all worked out. No security issues at the place. I think it was some neighborhood kids that knew the place wasn’t being used. I had to pay the full balance at the end of the 3 year term. I paid 100k in really rough shape and 10 years later the neighbors property just sold for 600k. That’s why I couldn’t move in immediately. Needed a new septic, water filtration, plumbing redone, complete remodel, etc… I would call it a distressed sale, but it had solid bones. The appreciation also accelerated net worth.
When you say get an apartment, do you mean buy or rent?
You do want to make sure that you buy, so you get the capital rollover tax exemption, otherwise you’ll be paying lots of taxes on the sale.
You can do a 1031 exchange with investment property to defer capital gain and taxes due. But there are complex rules.
And if you’re in MA don’t forget the additional 4% tax on any income over $1M. This was a surtax approved in 2022 and hits many people nowadays when selling a home.