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Buy the 4-plex
Subject Expert
Agreed
Im leaning toward the flip as it’s a block from my house and all comps point to a conservative $750k value once the work is done. I also have a strong GC that I trust to do work.
Subject Expert
What’s the sale price of the LTR you’re selling?
The problem with the flip is getting the money out of it. If you sell within a year, then the gains are considered ordinary income. I’m not sure how the deferred gains from the 1031 would be handled, but my guess is that you would owe depreciation recapture, which is probably more than the deferred LT cap gains.
How much rent could you generate post-flip if you turned that property into a rental, and how does that rent potential compare to the 4 plex? My guess is that the 4 plex would generate more rental income simply by being 4 separate units. Plus you get a bit of diversification having 4 separate tenants, which reduces the risk of vacancy across any single month.
Look at the MLG capital legacy fund. They seem to have a solid strategy. Take the distributions, which would be tax deferred. And I think there are redemption and liquidity options too.