Packaging SFR's

[Justin B.]

I'm curious as to how to package SFR's into a single deal. Here is why I ask. We have 5 SFR's right now. We're looking to move into Multi Family. We have the capital to get our first MFR and that's underway. Our 5 SFR's cash flow abut $1,300/month right now at an average of 80% leveraged. Since they cash flow well, we are not in a hurry to sell but I can see later this year wanting to trade them up for an MFR or 2.

We know we don't want to sell them individually and it would really only benefit us if we could sell them together (time wise and $ wise). We'd want to use a 1031 exchange most likely as we could probably pull $50-75k out of them for the exchange.

So what are the pro's/con's to doing it and what does the process look like? any ideas or thoughts? How do you market that, etc?

[Wayne Brooks]

First, I think you'll get more money selling them individually, whether as rentals, or to OO's. Are they desirable for retail buyers, or more suited to just rental properties? If the gain on the properties is less than $100k, I don't know that the deferral of capital gain taxes is worth it with the fees, restrictions, etc.