All Forum Posts by: Jennifer Lee

I PMed you about my experience 

to ADD, the only 2 issue we hit on with our 1031:

we replaced a condo apt (MA) with a commercial 6 unit office bldg (PA)

1. the OWNERSHIP has to be the SAME STRUCTURE!

We held the condo a joint tenant as husband and wife in a trust. 50-50%, We COULDN"T own the commercial with 1 single LLC.

We didn't want to hold the commercial in our personal name. so we talked to lawyers and the QI. we ended up using my LLC and my husband has to create his own LLC. (He didn't have one that is 100% his, only 50-50 with me). BOTH LLC are the buyers with 50-50 interest

Our single LLC with both of us didn't work.

2. MA recognized the 1031 and we didn't pay any capital gain in MA.  but PA STATE didn't recognize 1031. so we had to pay STATE level Capital gain in PA.... that was a oversight I misunderstood. but it worked out!

it's net sales price.
I don't know how to explain
they want you to reinvest into like kind property that is equal or great than net sales price of relinquished property.

my accountant told me, if u have debt/mortgage they want u to obtain higher debt. either keep your debt amount, or refinance to higher debt.

ex. you sell $500k, you have $300k in debt and $200k in equity.

they want to to replace with $500k or higher but your debt needs to be 300k or higher. keep your 200k equity 

it doesn't mean you replace with $200k.  ur are trading up, holding off your capital to the future. carrying it forward

I second Natalie (can't tag)

you can't do it on flips.

as for what to do with gain. I don't know.

we haven't crossed that bridge.
we 1031 exchange our primary home after it was a rental for 10 yrs. we lived for 5 yrs.

other units we live in flip. we took the exemption.

part of the reason I switched to buy/hold was the tax... and my flip was didn't make that much. it wasn't worth the trouble

Happy Birthday BP and Thank you @Joshua Dorkin! Thank you for this wonderful site. Definitely made an impact in my life. I was blessed to have meet so many supportive Knowledgeable group of ppl in one place ;p  

@Ann Bellamy  I second her post!! if its commercial everything is more expensive. a 250 inspection becomes a 2000+ inspection and all day event.  And ditto on lending you need to find the right broker to fund these smaller deals

#1 is research the tenant population  and Vacancies. See if you are comfortable with them and if the rental market is strong

#2 your 20K per unit is reasonable for that rental price point.

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Pitfall:  6 family tips you over to commercial..

#1 ZONING and USAGE: before you buy make sure that it can stay a 6 unit.  Sometimes it's non-conforming, so you have to double check with the county.

#2 CODES: Make sure you know if anything needs to be brought up to code. water meters, electrical, safety, egress, sprinkler systems. 

ex. I was told for my 6 units everything will be grandfathered in. "Heck the owner owned it for 30 yrs" said agent and seller. HOWEVER, what they didn't' know, was the township looked at seller as SLUMLORD, so he told me point blank, the bldg is not in compliance!  I talked to county to say I understand but he needs to work with me to give me time to bring everything up to code. He also worked with me on the list of things that needs to be done.

#3 EFFICIENCIES: One of the other thing is I realize, the POST OFFICE, ELECTRICAL and WATER COMPANIES wasn't happy with my bldg. so we have to move the mailboxes to a safer location. Upgrade all the electrical and install new wireless water meters.

The sprinkler system was there , but it wasn't active, and seller never paid the extra water fee for the sprinkler (hidden cost 175/quarter)  BUT I know these ahead of time, and I calculated that in CAM cost.  AND he never installed the Security to hook up to the sprinklers.

#4 LEASES: it sounds like yours is vacant, but if it had tenants make sure you verify the lease and term.

#5 CAM: Common Area Maintenance, this was the new thing I had to deal with.  You need to calculate the utilities to light and heat the hallway, landscaping, snow removal if you have sidewalks and parking lots.  

@James Syed no I only have SFR

I am considering my next move, CIAS, CDFE or CCIM hahaha 

I WISH!!!!

I wanted to add, the times I successfully get low offer accepted for myself or my clients:

1. Have an open dialog with the listing agent. And if we have worked together before the better.

you cant just throw low offer in an email and hope the listing agent bites on the other end.

If you do that, you will get an response "WE ARE NOT ACCEPTING INVESTOR OFFERS"

2. Understand the sellers motives, and needs.  You have to ask the right questions if you can.  Sometimes it's the agent's motivation. maybe they had the listing too long, and they are motivated to sell, and will talk to the seller.

3. Our offers comes with a comprehensive cost and repairs that are urgent and realistic.    This works better on foreclosure than homeowners.  

just my 2 cents

@James Syed that good to know, thank you

yes I have an SFR Designation, Short Sale, Foreclosure, REO

I work with Distress clients and Distressed properties, 

BUT for myself as an investor, I prefer commercial and multi unit.

So I was also considering CIAS (certified Investor Agent Specialist), or the CDPE (Certified Distressed Property Expert

I think the CCIM is a good idea for me. I am a Finance Major so a lot of the analysis I learnt for my degree