TRADING YOUR HOME OR PROPERTY FOR A MOTEL/HOTEL?”
“WHY WOULD A MOTEL/HOTEL OWNER TAKE YOUR HOME IN TRADE?”
“TRADING YOUR HOME CAN GET YOU INTO A MOTEL/HOTEL FASTER!”
Did you ever consider trading your home or property in as down payment
on a good income producing motel/hotel?
Well, it is possible and it is not very complicated. If you are
going to have to sell your property in order to get your money for a
down payment on a motel/hotel you have part of it thought out.
You probably have an idea what your property’s selling price will be
and after deducting selling expenses and your mortgage payoff you have
a pretty good idea what “net equity” or money you will have left Let’s
call that “Amount X”. You can imagine using “Amount X” as your
down payment on a motel/hotel purchase.
Trading of your property just “skips over” a lot of the steps that
would normally be part of selling it, like marketing time, finding a
buyer, cashing out your property at a closing sale, etc. Instead
of doing all the usual things under a trade you simply sign the deed to
your property over to the motel/hotel seller. That deed
represents “Amount X”, which is the “net equity” in your home/property.
Is this for real? Yes. Many people have heard about real estate
exchanges. The Internal Revenue Service (IRS) calls these “1031
tax deferred exchanges”. Meaning both buyers and sellers often avoid
paying all or part of any capital gains taxes on their transaction.
Exchanges are more common in commercial real estate sales than with
residential homes but that does not mean you cannot do it. . . .
Why would you want to do this? WELL THE REASONS ARE VERY
SIMPLE. Most prospective motel/hotel Buyers have all or most of
their money tied up in the equity of their home or property AND would
like to buy sooner, rather than later. Once they have found their
“opportunity” they understand that delays waiting to get their property
sold could cause them to lose their purchase. On the other hand,
Motel/Hotel Owners want to sell without having to wait out buyer
contingencies for the sale of a home or other property.
If a motel/hotel Owner agrees and accepts your home/property in trade
they will usually be reselling it in a short period of time. But
selling something that is usually priced smaller than the motel
purchase is an easier task.
Yes, Lenders consider equity given in an exchange transaction just as
good as cash and it all counts as your down payment on a purchase.
Lenders know about 1031 exchanges.
Yes, SBA considers equities given as downpayment the same as cash. SBA
knows about 1031 exchanges.
Yes, you still have all the usual contingencies under a motel/hotel
purchase like inspections, appraisals, title evidence, books and
records, etc. All the basic parts of the purchase transaction
stay the same under an exchange just as if you used cash.
NOW don't think that trading your property is really all that simple.
However by working with an experienced Hotel/Motel Broker who knows the
"mechanics of a trade" it can happen. About one fourth of the
motels/hotels we sell include trades of some type of property. IN
FACT MOTELS BY GUDIM practically invented trading homes in for
motel/hotel ownership. Many real estate agents "talk" about
trading. . . . .but few really know how to do it. At Motels by
Gudim we have sold motels to many people where they traded their real
estate and are familiar with how to do it right!
Many types of property can be traded: Houses, lake homes, duplexes,
apartments, land, contracts for deed, mortgages, stocks, etc., so don’t
be afraid to ask us questions.
MOTELS BY GUDIM - SINCE 1945