All Forum Posts by: Arthur Savery

We have "trapped equity" in a long term rental condo and are considering selling it and doing a 1031. Has anyone done a 1031 into DSTs that can share their experience? I found a number of older posts, but I haven't seen anything recent or recent updates on the older posts. I'm looking for general feedback on the strategy, brokers, sponsors, etc. Thank you in advance.

-Andy

2 Votes

Quote from @Chris Stratton:

Hi Guy,

We did buy into a couple of units with a DST vendor (Kay Prop). Experience has been positive, and we've had excellent service from Kay Properties. One was a straight-up purchase, the other included a loan component. The "loan component" means, I believe, that on selling, my basis is higher, so to continue, I would have to buy another loan component DST or face some same-year tax consequence. The 'buy in' costs are high, no doubt. The checks have, so far, just kept rolling in. We had a very slight increase recently in the smaller of the two investments. Honestly, not sure I would go/do something else different if these ended. Chris

Chris, Would you mind posting a current update on your experience with DSTs and Kay Properties? Thanks much!

0 Votes

thank you

0 Votes

Quote from @Jaycee Greene:

Quote from @Arthur Savery:

Quote from @Jaycee Greene:

Quote from @Arthur Savery:

Investment Info:

Condo buy & hold investment.

Purchase price: $320,000

Currently have a long term renter, the rent pays the mortgage and other expenses but provides no cash flow. Planning to sell and 1031 into 2 similar properties in the Columbus, Ohio area in the next 1-2 years.

What made you interested in investing in this type of deal?

Conducted personal research.

Hey @Arthur Savery, welcome to the BP Forum! Out of curiosity, if you're looking to 1031 into 2 properties, are these smaller properties? What price range are you looking for?

Thanks Jaycee. The condo I'm selling in CA could sell for approximately $600k, and I was thinking of rolling that into 2 condo/townhomes valued at about $250k each, then doing DST for the remaining around $100 for the 1031. That would minimize and maybe eliminate the need for a loan for those properties. I still owe about $140k on the current condo.

Sounds good! Are you averse to borrowing/leverage? Or do you just not want to deal with lenders?

Trying to avoid borrowing as much as possible. I'm looking to make this part of the retirement stream of income rather than an effort to accumulate multiple properties. Although I'm not ruling out doing another 1031 in the future to add a property or two. Just don't want to get too aggressive at this point.

1 Vote

Quote from @Jaycee Greene:

Quote from @Arthur Savery:

Investment Info:

Condo buy & hold investment.

Purchase price: $320,000

What made you interested in investing in this type of deal?

Conducted personal research.

Hey @Arthur Savery, welcome to the BP Forum! Out of curiosity, if you're looking to 1031 into 2 properties, are these smaller properties? What price range are you looking for?

0 Votes

Quote from @Ben Trageser:

If you are looking for a good 1031 QI, let me know as I have one that a majority of our clients work with.

thanks Ben--I'll reach out

0 Votes

Quote from @Dave Foster:

@Arthur Savery, This can be a great game plan called a diversification exchange. The key is that in order to completely defer all tax you must purchase at least as much as your net sale. And you must use all of your net proceeds in the purchases.

The opportunity for you is that you can allocate the cash from your sale anyway you want. You don't have to split it up equally in between purchases. In fact, many of our clients will concentrate their cash into one of the purchases and even purchase it with no debt if possible. Then they will take out leverage to complete the purchase of the second property. This leave them still deferring all tax. But also with low debt or free and clear property that they can easily access any time in the future with a cash out refinance.

Thanks Dave-I'm reading one of your books now.

Roughly, I estimate I can sell the California condo for around $600, then 1031 that into condos/townhomes priced at about $250k. To ensure my replacement property value is at least $600k, I was considering putting the remaining $100k into a DST. When I do this, I'll have about $130k in mortgage debt remaining. What do you think?

0 Votes

Investment Info:

Condo buy & hold investment.

Purchase price: $320,000

What made you interested in investing in this type of deal?

Conducted personal research.

2 Votes

All Forum Posts by: Arthur Savery

Arthur Savery has started 2 posts and replied 8 times.

Post: Considering a 1031 Exchange into DSTs

Post: 1031 Exchange - DST?

Post: Planning to sell a long term rental condo, use 1031 and buy 2 condos

Post: Planning to sell a long term rental condo, use 1031 and buy 2 condos

Post: Planning to sell a long term rental condo, use 1031 and buy 2 condos

Post: Planning to sell a long term rental condo, use 1031 and buy 2 condos

Post: Planning to sell a long term rental condo, use 1031 and buy 2 condos

Post: Planning to sell a long term rental condo, use 1031 and buy 2 condos