1031 Into New Market Cash Flow Properties

[Scott Hanson]

I have multiple properties in the Los Angeles area that are being sold, and we are looking for new markets to 1031 exchange into. In the past our model was largely built around property appreciation. However, with this change we would like to reoptimize the portfolio for cash flowing properties, and are not particularly concerned with appreciation. We also have two other investors/portfolios who are looking to do the same thing. Looking for advice and real estate professionals to meet and potentially work with. 

[Siraj Alsafar]

Quote from @Scott Hanson:

I have multiple properties in the Los Angeles area that are being sold, and we are looking for new markets to 1031 exchange into. In the past our model was largely built around property appreciation. However, with this change we would like to reoptimize the portfolio for cash flowing properties, and are not particularly concerned with appreciation. We also have two other investors/portfolios who are looking to do the same thing. Looking for advice and real estate professionals to meet and potentially work with. 

Hi! I love that you're doing this! I'm a licensed FL RE agent looking to do the same thing. I've already identified some markets, have visited most of them and I intend on visiting the others as soon as I have the capital to do the deal there.

I have the same vision for my portfolio of stabilized, high cash-flow, Multifamily 20-30+ Units comprised of mostly long term tenants in HIGH rental demand areas. We will also purchase in ecotourism locations so we will most likely have a few Short Term Rental units. These markets which have thrived for hundreds of years are ignored by traditional investors and institutions that want to buy in LA & Miami but ignore that rental prices are at all time highs while income has not grown to match it which creates an unprecedented risk.
  Some of these markets are not only more stable than the traditional markets, but they are also priced way better. 

Currently, I want to buy a 2.1m Apartment building which is in the downtown capital of a state right now. It's appraised for higher than 2.4m and it currently has an in place, not proforma 13%+ cap rate with room to grow.

A couple different notes: We find highly stabilized properties where rentals are in high demand, we can implement RUBS or a flat rate utility bill back for common areas and utilities provided to the tenants. In most cases this can easily add at least 20,000 a year to the bottom line where as before it was simply an expense.

The STR units not only serve to push the cap rate even higher, but are nicely blended with long term leases for the remaining units which not only dramatically reduces the risk but increases cashflow. Most importantly though, it also gives an opportunity for our potential and actual investors to not only profit from their investment but it turns annual inspections into vacation rental for the family.

These locations are all over, the Pacific North-West, AK, MT, WA, ID, and so many other states not only just on the west coast.

We acquire these properties under the appraised value and significantly under the cost of replacement on average the Multifamily and mixed use buildings I'm looking at acquiring if I have the capital are between $100-$150 a square foot.

I would love to connect and discuss all options whether we want to work together or just have a pleasant conversation!