Selling investment properties

[Felipe Guerra]

Hi everyone

I recently sold my 3 multifamily properties in San Diego CA -With the objective of doing a 1031 exchange; however there were some issues along the process that ended up taking more time than planned.

Currently I have about a week to identify properties for the 1031 -I been looking at properties in the SD location (not looking to invest out of southern CA) and have not been able to find something that makes sense (cash flow, location and property condition).

I've been feeling tempted to keep the cash ($1M) pay taxes and take my chances with the brrr method -I'm looking for your recommendation, what do you think ?

Thanks in advance !

Felipe

[Scott Wolf]

@Felipe Guerra, why can't you find a property to BRRRR that fits in the 1031 exchange. Talk with your accountant and QI about buying multiple properties to finish the 1031 exchange. Good luck to you!

[Twana Rasoul]

@Felipe Guerra Are you looking to replace with residential multifamily, 2-4 units or with 5+ unit apartments? I hope you are really analyzing the opportunities available to you to see how far the numbers are off from what you need vs paying capital gains and depreciation recapture on $1M+.   depending on what you are looking for I'm sure there are good options available to you on the market or what some of us may have off market that might work for you.  Don't give up yet!

[Cody L.]

My advice:  Don't 1031.  Eat your tax penalty now vs kicking the can down the road to a time when taxes are sure to go up. 

[Maxwell Ventura]

@Felipe Guerra

InitialCF will typically look poor out here. Have you considered the potential to add additional units / ADUs? 

Which type of properties are you going after? SFR, 2-4, 5+?

And what locations? I have a few off markets / coming soons too. 

Thanks 

[Tina Tsysh]

Don't buy a deal just because you are running out of time. It is better to pay taxes than to be stuck with a bad deal and have all the headaches. Reach out to a few realtors, I am sure they should have some off market opportunities that might fit your criteria.