Ed.. 1031 Exchange in Fresno, CA area - Posted by Russell Jacobie

Posted by Steve Flanagan on March 12, 2003 at 11:44:47:

If your income is sufficient to carry the mortgage on the condo as a second home you’ll lower your borrowing costs. Steve

Ed… 1031 Exchange in Fresno, CA area - Posted by Russell Jacobie

Posted by Russell Jacobie on March 02, 2003 at 09:08:37:

Hey all,

Well this is my first time posting on the forums. I must say the fact that Ed Garcia posts here is pretty amazing for a free access site, usually that kind of advice would cost big $$.

Anyway, I’m gonna put in my own freebie question to Ed. I have a Condo in Sacramento that is currently being rented and I’d like to do a 1031 exchange and use the equity (about $110k now after all loans paid off) to buy a 6 to maybe even a 12 plex here in fresno, depending on the GRM. I figure with the 100k I can secure a half million dollar loan, etc. Anyway, the quetion is this, can I sell a Condo that is currently rented out without the tennents permission? She has 10 months to go on her lease, so I guess I could wait, but what if she says it’s ok? I haven’t asked her yet, but is that even legal to sell a place that is rented?

Anyway, thanks for the advice, if it goes through, Ed, I’d like to use you for some future financing in California.

Thanks,
Russell Jacobie
559-903-8091

Re: Ed… 1031 Exchange in Fresno, CA area - Posted by Ed Garcia

Posted by Ed Garcia on March 02, 2003 at 11:37:18:

Russell,

Yes, you can sell the condo without the tenant’s permission.

Your choices are to negotiate an early buyout on the remaining 10 months. I would just run it buy her, to see how she reacts to the idea. Who knows Russ, she might even want to buy it.

You could offer her a free months rent for the buyout on the next place she rents.

If she doesn’t want to play ball, then the new owner must be told of the remaining time on the lease. They may want to keep her as a tenant or be willing to wait until the lease is up. Real world is, if you put it up for sale today, it wouldn’t sell and close for at least 90 days, now you have 7 months left. So this should not be a deal killer.

If you found a deal prior to the sale, you could also borrow against the condo for the down payment on your next acquisition. So there are a several options open to you and you are not locked into or limited to waiting to see what she wants to do.

Ed Garcia