All Forum Posts by: Joe Howell

@Dave Foster Thank you for the reply!

1st paragraph: That makes sense, however if I am the sole owner of investment real estate, sell that property, then invest in a Real Eastate syndicate, how is that not "Like-Kind"?  I think I know the answer, as I am going from owning property, to owning a share in a company (llc, lp, etc.), correct?

2nd paragraph: That's starting to make more sense, as I actually start analyzing how the ROR and IRR relate to each other.

3rd Paragraph:  That is good to know.  So if I have to pay Capital Gains on the investment (which I would presume I would do on a yearly basis with K1's distributed to me) how would that look on the back end?  To expand upon my statement above and put it in real terms, an investment of $100k which is borrowed at 5% interest yields the following in an 8% ROR:

8% ROR on $100k = $8000/yr

5% Interest on $100k = $5000/yr

That is a net of $3000/yr

After 5 years, it's a net of $15k.

Now I'm trying to figure out how the IRR plays into this number. More specifically, what would be the distribution if the property is sold at what the GP's assumed it would sell for (or refinanced), then figure in taxes, which would then get me a real number of how much my current investment would be worth (NPV?)

@Michael Bishop, thanks for the reply!  More specifically on the 1031x, if I sell my property, then take the profit, identify (within the time frame allowed) and invest in an apartment syndicate, would that qualify for a Like-Kind Exchange?

Or, as you are saying, since it is shares in a company I am buying for a syndicate, that wouldn't be Like-Kind?

If that is the case, then maybe a HELOC on my house may be the way to go? If I get a fixed HELOC at 5% for 5 years, then find a syndicate which provides, say, 8% ROR and 15%IRR after 3-5 yrs, that sounds like a good use of the equity, correct?

Then what about the back end: if I take the payout of my original investment after 3-5 years, pay off my HELOC, and have the 15%IRR cash, do I have to pay Capital Gains on that, or can I identify a new Syndicate to invest that money as my "Like-Kind" exchange? Or is this now stretching the definition again?

I'll ask my CPA, but would love to hear what you and the rest of the group has to say about this strategy.

I just finished listening to podcast 324 for the 4th time and am really interested in taking a closer look at investing in Apartment Syndications. I'm kind of at a crossroads trying to figure out if I continue with small multifamily bldgs, jump up to 10-30 unit bldgs or invest with a syndicate. 

My main question would be if I sold a property to invest in the syndicate, I would still have to pay capital gains or does it qualify as Like-Kind (1031exchange)?

Also, @scott, 7months later, any updates to how everything is going? 

@Paul Allen and @Carl Fischer Thanks for your advice!  I reached out to my accountant and he saved me from making a HUGE mistake in listing all of my properties.  I owe you guys big time!!!!

To all the BP Tax Experts,

I am thinking of selling my properties and was doing research on capital gains rates. I ran across this article and was wondering about the income threshold. Is my capital gains rate based upon my adjusted gross income of my personal return (LLC flows thru into the personal return), or is it based upon the total wages earned (W2, 1099, other business income, etc.) for the year? Also, the income earned doesn't include the sale of the assets, correct? i.e. my W2 income plus the gain of the assets/buildings does not equal the "maximum taxable income" qualification of the rate chart. It is the total income of W2, 1099, other business income, etc. which determines the maximum taxable income.

I understand the option of 1031 exchanges, but am exploring all options at this point and am wondering what my taxable income is based upon for capital gains rates.

Thanks to all in advance!

To all the BP Tax Experts,

I am thinking of selling my properties and was doing research on capital gains rates.  I ran across this article and was wondering about the income threshold. Is my capital gains rate based upon my adjusted gross income of my personal return (LLC flows thru into the personal return), or is it based upon the total wages earned (W2, 1099, other business income, etc.) for the year? Also, the income earned doesn't include the sale of the assets, correct? i.e. my W2 income plus the gain of the assets/buildings does not equal the "maximum taxable income" qualification of the rate chart. It is the total income of W2, 1099, other business, etc. which determines the maximum taxable income.

I understand the option of 1031 exchanges, but am exploring all options at this point and am wondering what my taxable income is based upon for capital gains rates.

Thanks to all in advance!

Sorry for the delayed responses, I use CPM for my units. I really like how they have an online portal that keeps me up to date on my finances, tenant inquiries, notes, etc....basically everything that goes on with my property. Cons include their speed of turnover and pricing for make ready. But really, the saying is true that nobody is going to manage your property like you. The convenience comes with a price.

Thanks everyone for your input.  If they aren't on the DnC list, I assume I'm good to go, no?  My question was more of a, "is it legal to use the contact info from the Form?"  I assume yes if the county plasters it on the interwebs.

I am trying out some new strategies to find deals in my area.  One strategy is using my county assessor's website to find the current owner of properties, how much they paid for the property, size, number of units, etc.  One document I have found is the Real Estate Transfer Statement (Form 521), which includes the telephone number of the person buying and selling the property.  Does anyone know if it is legal to call the person(s) based upon the phone numbers found in these documents? (This is for the state of Nebraska, by the way) 

Thanks in advance!

@TylerBain I use Russ Kreikemeier (Kreikemeier Law) as my RE lawyer.  He is a great guy and very detail oriented with his contacts.   He'll make sure you not only don't get skrewed, he'll work to stack the deck in your favor.  If you do a Google search, it will show up as his office in West Point but he has one here in Omaha as well.