All Forum Posts by: Alex Todd

@Mike Grudzien 
@Andrew Steffens

its the way we're leaning and glad Im not off base. 

@Devin Peterson - great question - We're securing cash flow with a larger down payment (due to 1031x requirements, roughly 32% down) and taking advantage of some bonus depreciation initially. With rates the way they are, and our equity position today v what it will be in 3/5/10yrs...I think the plan is always to cash out refi down the line while holding property. 

Hey BP! Were in the home stretch of executing a 1031x and securing a loan for our replacement property, an existing STR with a pretty existing DSCR (+1.2) that we have under contract.

We were just planning on doing a conventional 30yr fixed rate (looking like ~7%) through our existing broker and contacting a local (local to the STR) credit union to see what they can offer. My question is : should we be looking at alternative options? 20yr / 15yr term? DSCR loan? any other ideas?

Thanks in advance!

@Michael Baum - awesome - thats the plan for now. Thank you!

@Andrew Steffens - 

#2 looks like a great option. Can the new listing co-exist on Airbnb for the same property as the old one?

Once we officially close on property, I can just create a new listing with only available dates beyond the end date of PM contract.  The guests search dates would just determine what listing they see. 

Thanks for the input! 

BPers! We're 1031x a long term SFH into an STR and couldn't be more excited about it! Our first jump into STR land. As part of the 1031x, we have an extended close date and with this the seller has asked that we honor current bookings until close date + 1 month (takes us to end of September), which we accepted as a term on the offer.

My questions are around the cutover and how to do it as smooth as possible : All bookings up until End of September will route through current Airbnb listing (and property mgmt team) and starting Oct 1, they would see/book/use/cutover to our new listing/account.  

How soon should we have a new Airbnb account and listing created with backend systems in place?  Seeing as we want to update the listing that people can view (new pictures, language, branding, etc) BUT won't have the keys or own the property until closing...what do y'all think the best way to do this is?

Anything else that should be top of mind for the transition period?

Addtl points : 
1. We wont be retaining the current property mgmt team and self hosting, while keeping all local staff (Cleaners, handyman, etc) in place.

2. Current STR is performing and is being bought turnkey and fully furnished.

Thanks in advance!

@Basit Siddiqi and @Sean Graham let’s play this out a bit for discussions sake.

$3M MF property, depreciation and mortgage interest are ~$180,000. Cash flow in year 1 was $50k. If W2 income was $300k and losses are now $130k…we can write those losses off against the $300k making taxable income -$170k.

All hypotheticals but is this accurate? 

Hi all - my wife and I are planning on a April 2025 1031 exchange into a larger (for us at least...like 5-8 units) multifamily unit. An idea we have is, I am burnt out from W2 life, and wife makes great money (+$300k) , and I could take the year to repair/renovate, manage, rent, repeat the units in the MF qualifying for REPS status (50%, 750hrs, material participation, etc). 

This could have three fold impact ---> allow for writing off paper losses against W2 income, increase the property value by increasing monthly rent, and all the normal cash flow benefits for RE...right? Anything else I'm missing?

What we're struggling to understand is how to underwrite/estimate the paper losses that a MF would produce and IF this strategy is worth it from an income/tax savings perspective. Am I overthinking it, or is the underwriting...Depreciation (with or without Cost Seg), Mortgage interest, normal operating expenses? 

I appreciate the guidance! 

 Thanks @Becca F. - I totally agree with you on the location piece and that makes this tough.This isn't just about cash flow but a seemingly unique and great oppty for taking $500k of tax free Sec121 dollars off the table.

Curious if you see the the alternative strategy to be : 

- to hold the SFH long enough for appreciation + CF to cover the $500k + taxes on those capital gains if selling?
- Hold until the monthly rent increases enough over next 10yrs where with a cash out refi we would still be net positive cash flow but be able to pull out that $500k tax free? 
- hold forever and stack up W2 earnings invest elsewhere? 

@Dave Foster It was our primary, then moved to rental for last 2 years..thus fitting into both the 121 and 1031 options, no?

How standard is a floating close date? We're actively trying to structure our "buying requirement" checklist to walk through with our tenants/buyers and want to be crisp on our asks outside of asking price. 

6% in appreciation in 10 months, not likely :)