[Music]
jim's in sacramento hi jim how are you
good how are you better than i deserve
what's up
good i got a little bit of a pickle here
we
we sold one of our rental properties out
here in california and we have
approximately 310 000 in a 1031 exchange
by the time we were able to evict our
tenants and get out the market has kind
of climbed a little bit higher
we have uh we have emergency fund we're
on baby step seven no bills
and uh but the problem is we're kind of
just short on cash
without liquidating our emergency fund
out to buy another rental property um
obviously don't want to take a loan but
i also don't want to pay
60 plus thousand in taxes
what would you do
you have 310 000
yes sir i buy 310 000 rental property
you can't you can't find them out here
that's that's not true
you can't find one you like
correct
but they're there i have
i have my emergency fund as well as some
additional cash but it would
take my emergency debt fund down to just
a low amount
explain to me what that means how much
money are you talking about
uh we typically keep about 30 000 in our
emergency fund so you're telling me you
cannot find a property for 310 but you
can for 340.
uh they're running well i have
additional money as well i have
additional 50 or so 40 50 000 in cash
but i don't want to want to liquidate
every dime i have down you know i would
have to go down but i mean you're
telling me you can find a house for 360
but not 310.
yeah it's pretty close yeah
yeah and the market is crazy hot
well i know that
but
um
well
you can do what you want to do i'm i
think you uh
i it's just illogical that you can find
360 but can't fight 310.
i mean if you told me you can't find
anything for under 600
uh
but so my 310 won't work
you know i
will argue about that that's that's at
least a logic argument logical argument
but three 360 versus 310 that could be a
matter of negotiation that could be a
matter of finding one that needs the
gutters replaced
correct yeah no i understand we're
looking at right about 383.90 and i have
the cash for that you have a particular
property you've fallen in love with
no absolutely i don't fall in love with
real estate
you have a particular property you have
your eye on
we do we have we just we're down to
about 14 days to identify a property in
that 1031. so we want to you know we've
had we've got two two or three we're
looking at right now and they're right
about 380 390. um it just puts my
emergency fund you know down to about
1000 bucks
uh we make about 220 230 depending on
bonuses so your emergency fund's down
for one month or two months yeah yeah
that's kind of my thought yeah yeah yeah
i think you rebuild the emergency fund
like it's an emergency and you close on
something if you've got 13 days but
moral of the story is don't wait until
you paint yourself into a 13-day corner
so you get desperate and have to make a
move that's pinchy because this is
pinchy it feels pinchy but this is all
because not wanting to pay capital gains
yeah you could buy less that's yeah
um and you could buy you know
hypothetically
you know go to another market even go a
hundred miles away that's what i'm
wondering if you can buy and buy 200 000
property you're going to pick apple
games on 110 not on 310 then so you only
pay on what you don't use up out of this
i despise taxes you know this i hate
them but but but i mean it doesn't need
to be the top the tail that wakes it up
that's what i'm wondering if it's okay
it's putting some false pressure here i
don't it's not false pressure well it's
making you prioritize the wrong thing
thank you for saying that better yes but
it's like make good business decisions
first great tax decisions second yes
not great tax decisions and bad business
decisions that's exactly that's what's
bothering you yeah yeah you're right i
feel like it's just the wrong thing is
driving the train right so i think
you're going to close on a 380 000
property because i think you can't get
your head off of it
that's what i think you nailed that i
mean he's got something he goes this is
a good deal if i can get it you know and
he's going to get it so you make two and
a quarter no don't borrow money um
you're gonna do it and you're gonna take
a you know you're going to run three
months or four months without a properly
funded emergency fund while you rebuild
it with a 200 000 income and no payments
in the world
so um but
god help you if something breaks in that
new rental the first month
you got no money that never happens
though dave
wow you're the real guy
i think it's worth talking about i hate
taxes i do too i will do
almost anything except a bad deal and
that's what i'm getting at to avoid bad
to avoid paying taxes here's a guy
that's at baby step seven he's crushed
it he's done a phenomenal job with his
money yeah and to try to avoid capital
gains tax when you're capital gains on
300 000
is 60. yeah okay but capital gains on a
hundred thousand is is you know right
15. so
um you know you buy something cheaper
too as a possibility but here
guys you you um
the the pr
in the decision making frameworks that
we use all of us use
when you paint yourself into a corner
and you start making statements like
they don't have any of those
that's when i start challenging you
because they always have one of those i
don't even know what those is yet
but there's always another option
when you start telling me there's you
know it's like bless your heart when
you're in youth ministry and they go oh
she broke up with me and she's the only
woman on the planet yeah no she's not
yeah but by tuesday you'll see another
one
[Laughter]
that's the truth that's the truth it's
fatalism thing you know god only that's
the one that god picked out for me
there's only one no no there's another
one had a guy say that to me once he
said well what i really mean is she's
the only one that would love mango now
that is possible but