Babyboomers leaveing Real Estate Investing

[Jake Decker]

Hello BP members,

I'm loving the vast knowledge on the forms. I've been looking around and haven't see an answer for this.

I am working on several strategies for baby boomers who want to leave the real estate investing world. Some boomers want a more secure income without the hassle and fluctuation of market values. 

Aside from lease to own, and installment purchase from the owner can you please give me insight into other ways a seller would like to offload their properties without a huge tax hit.

**"Consult with a CPA first before...."

Thank you,

Jake

[Jay DeCima]

Jake,

Yes I can.

It is called "pajama money".

Let me explain.

At my "high mark" I had 250+ rental houses in Northern Ca.  I did not buy them one at a time.

I developed "my way of investing".  I buy groups of houses (usually 5+) on a single parcel, needing work.  The seller knows that over 5 units and needing work, that I will NOT be able to get bank loan.

So I have the seller take back the financing.

I do lots of things in between you increase value and rents............but when I sell, I want "pajama money".  I will only sell with my seller financing.  Each month I can collect mortgage checks, made out to me, from my mail box......in my pajamas.  I am in control.

Also, I DO NOT WANT TO TAKE BACK THE PROPERTY FOR THE BUYERS.  I want them to be successful.  I will sell with a low down, and structure payments to no be more than 50% of monthly rents.  Yes, doing that may have me charging a lower than market rent..........but in exchange, can I raise the price?

You bet I can.  Most newer investors on BP would jump at the opportunity to buy a group of house with good cash flow and a higher price.

You mentioned taxes.  Even though I raised the price to offer good terms, I only pay taxes on the principal part of the payments.  Remember, at the end of my career, I no longer need a big chunk of cash.  I can collect monthly mortgages for 10 or 20 years and not realize the entire capital gain.

If i get called to the "final closing" (that's death) my heirs take over the property at the value it is worth today and their basis is pegged to today's value.

Advice to you. Figure out how to do this and forget about teaching boomers about leaving real estate.  What are you going to tell them.....buy stock.  Don't waste your time.  Choose what has worked for a long, long time..... Buy and hold (and add some new twists to the philosophy.

That's the 'ole timer in me offering the advice.

Good luck.

Let me know if I can help.

Fixer Jay DeCima