In this video, we will walk you through how to sell a property and reinvest those funds in a new property or investment account.
Transcript
I have a principal residence valued at $700,000, with a mortgage debt of $300,000. I want to sell this property, so I’ll open it up and go to the Timing screen.
I’ll set this as the End Event and click Done.
Now, in the plan, you’ll see a spike in this year. If we turn on Details, you can see this represents the asset liquidation from selling the property.
Looking at the next year, we can see $433,000 of revenue against $284,000 of debt. The debt is paid off, and the end-of-year balance is zero. The proceeds from the sale are first used to pay off any debts on the property.
Next, we need to tell the software what to do with the remaining funds. We have two options: invest in a new property or transfer it into an investment account.
Option 1: New Property
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Click New Property → New Home.
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Assume the client is downsizing.
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Set Yes for a future purchase.
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Set the Timing for the purchase to the next year as the Start Event and click Done.
Now, you can see the asset liquidation funds are used to fund the new property. The purchase price is shown, and no debt is applied, since there was enough cash in the plan to fund it.
Option 2: Transfer to Investment Account
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If we remove the new home, the asset liquidation will just sit in the plan.
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We can schedule a transfer instead.
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Select Transfer From: All Surplus, set the year of the sale as the timing, and choose the client’s Non-Registered Investment Account.
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Set Amount: All Available and Recurring: No, since this is a one-time transfer. Click Done.
Now, you can see the black line in the cash flow chart, and in Your View, you’ll see the contribution going into the non-registered account.
I hope this was helpful. If you have any questions, you can always click on the name of your client in the top-right, select Request Support, and enter your question.