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I have some vacant land in the San Bernardino Mtns, CA that would make a wonderful home site. I was going to build here but with the real estate market being what it is, Id like to swap it. What are the problems/possibilities of using this as a DP on a business in say Oregon?

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Answers (4)
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San Bernardino County, CA

Hello Ian

Yes its about 14000 sq ft, sloped lot with an excellent view of the city lights; its in Cedarpines Park near Crestline CA. I have plans for a house I was going to build there as well (modern, lots of glass).

Sep 4, 2009
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Do you have any info on the land?

Sep 4, 2009
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San Bernardino County, CA

Hi Don and thanks for the intense answer. Im sure its more complicated than I figure, but on the surface it could be a real low level transaction. The lot was worth at its peak about 20K. I want to find a small business like a coffee shop or deli that a present owner will look at the land and some cash. I understand your analogy but thats too high end for me. This could be a simple transaction if I find the right seller! But again thanks for taking the time to give such a thorough answer! Cheers GF

Sep 3, 2009
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The BAF Group LLC
MD

Gene, I am uncertain I understand what you mean. If you are saying you want to swap the land you own, with a business owner in exchange for a down payment on buying his business in another state, there are a couple of issues. First, finding an exact business that you want to buy, from a specific owner who might want land in San Bernardino, could be like the proverbial needle in a haystack.

Second, if the business you want to buy is to be financed by a bank of the SBA, you may run into problems with how much the land is really worth, relative to the value you place on it for your down payment. An appraisal would undoubtedly be required, in order to determine objective, fair market value. And don't do that yourself, if you get that far; the bank or SBA will want to name the appraiser.

Third, if you get a business owner to go along with this, and he or she finances the balance, you have a much different and easier road. But you still may have some wierd Capital Gains situations, so both of you need to check it with your respective accountants.

I have seen such swaps done, but normally in deals that were "like kind" types of situations, which is to say you swap one apartment building for another. But when you start trying to do that in a situation where you are trading something that is tangible, for something that is intangible, you are at the very least looking at a long, difficult struggle, I am afraid.

Sep 3, 2009

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