Real-estate Exit Plan

[Pixel Rogue]

Hello everyone,

Imagine this topic would get more engagement in a Creative Financing space. We have been in real estate (long-term rentals) for over 20 years now and looking forward to hanging up the maintenance hat. We want to plan in the most tax vantaged ways (which includes keeping future AGI as low as possible) and open to new-age and creative concepts.

Respectfully ask to keep discussion to topic vs. selling one's self or services seeking new business. Thank you for understanding. 

Portfolio
• Investment quad - owned for close to 20 years. Low LTV, 30yr fixed @4.5% personal (1)
• Investment condo - new const. high end purchased w/1031 (from 20yr quad) in 2019. LTV dropped to 50%. 30 yr fixed @ 4.3% LLC (2)
• Investment condo - new construction high end purchased in 2019. LTV under 50%. 30 yr fixed @3.75% LLC (3)
• Investment condo - purchased 2021. LTV under 50%, 10 yr arm @4.5% LLC (4)
• Investment condo - purchased 2021. LTV under 50%. 10 yr. arm @4.5% LLC (5)
• Investment condo - purchased 2022. LTV under 50%. 10 yr arm @4.5% LLC (6)

First Step
• Create trust and purchase forever home via 1031 (which would be either 1 or 2.) Rent for a few years and convert to primary.

Next Step/s
How do we shift while keeping AGI at lowest levels? Expect any step needs to play well w/1031. We meet definition for qualified investor.
• DSTs: Seems as though returns are rather low, low transparency on opportunities (?)
• OZs.
• Retirement communities
• Syndicates (from initial explorations, little transparency from providers, little oversight - almost leap of faith and trust in provider?)
• Crowd-sourced projects (think Crowdstreet, Fundrise, Roofstock)
• Moving into investment for 2 years and sell (seems extreme and low level of confidence in strong desired results.) 
• BBD - Bulk everything together into one large investment, cash-out refinance, rinse/repeat (seems like ongoing work like we have today.)
• NNN - purchase triple net lease opportunity (1031 everything into it, managed under trust, tenant takes care of everything) 
• Sell each off the normal way (even spreading out one a year, heavy tax implications and truly diminishes decades of work.) 
• Give/donate each away

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I expect many here have already been through similar dilemmas and interested in experiences, lessons learned. What other concepts could be added to list of options? Of the list of options, which stand out as better opportunities and why?
(yes, each option has volumes of disclaimers, circumstances and variables...at a high level, conceptually and then we can go deeper as needed.) 

[Drew Sygit]

@Pixel Rogue everyone has different future plans - many though haven't thought that far ahead!

As already mentioned, you could sell via seller financing to lower AGI, as all you would have to claim is the payment income - until balloon payment received.

Did know an investor that had 14 properties paid off and he moved into one every two years to then sell with the $250k single exemption. He had a Viper and several other toys:)

Are you planning on passing any of your wealth to others?
- If so, 1031 into something bigger and easier to manage and then when you pass, the inheritor receives your property(s) at a stepped up basis - subject to Inheritance Tax limits.

Otherwise, sell one every 1-5 years when you need the cash, so you can plan expenses to offset capital gains.