All Forum Posts by: Tony S.

I should also note the seller is open to sell-financing, though I want to understand how that prevents the seller from being taxed on the full amount.

My understanding of seller-finance is that the seller signs over the deed to the property to the buyer, and the buyer gives a 20% down payment to the seller with a promissory note for the remaining balance over a period of time (i.e., 5 years amortized over 30 or whatever the parties negotiate.

In essence, the seller acts as the bank though the property is still sold to the buyer.  Wouldn't the seller get taxed on the full purchase price of the purchase contract notwithstanding how the buyer finances the purchase price?

Hi Guys,

I'm in talks with a seller to purchase an 18-unit high quality apartment complex. The only issue stopping the deal is that the seller does not want to pay the tax obligation on their long-term capital gains. If he has to pay them, the deal is no longer worth it for the seller. 

Do you have any ideas on structuring this transaction for a minimum tax hit for the seller? Would a lease-purchase option help? 

Any help would be greatly appreciated.  Thanks!

Tony

Would be curious to hear everyone’s thoughts on Asheville for the rest of 2022 and 2023?

With rising interest rates and market uncertainty, have you noticed any sort of slowdown in Asheville? If so, do you think it’ll continue to slow down over the next 12 months?

 This deal was a 30 minute drive outside of Charlotte uptown.  

I seller financed 66% of the purchase price and gave the seller a second priority lien on the properties. I took out a private loan on the rehab and gave the private lender first priority lien on the properties. I only brought $80,000 cash into this deal. After I rehabbed all the units, I refinanced within 10 months to pay back my private lender, the seller, and to pull all my money out.

This was a bad street with an open-air drug market on the edge of a neighborhood that showed beginning signs of gentrification (about 15%-25% of the neighborhood was gentrified at the time I was looking).  I nearly bought a whole street.  Once I rehabbed these buildings inside and out, additional investors came in and built new construction homes and rehabbed almost all of the remaining buildings on the street.  There are still 1-2 isolated problem houses remaining on the street to this day, though the police department is keeping a close eye on them.

 Thanks so much!

Hi Guys, 

I'll keep it brief, but wanted to document my success below while the numbers are still fresh in my mind. I'm actively looking for a new off-market multi-family deal and also looking for private lenders for my next multi-family venture, so please message me for opportunities if interested.  

I made 7-figure profit off some deep value-add properties on the side (while working a full time job) with a portfolio deal I purchased in 2019.  Below are the details.

Details:

Before this portfolio deal, I only owned a couple rentals.  This portfolio of properties were off-market 19 total units in a D neighborhood.  During my walk-through, there was an ongoing murder investigation on one of the units with police presence.   Some subcontractors refused to give me a quote after visiting the properties.  Half of the properties were abandoned or vacant for several years.  There were zoning violations and weird subdivisions.  It was a scary deal from an economic and safety standpoint. But I was hungry and with the support of my wife and a good team in place, I was determined to stabilize the street, clear the zoning violations, put qualified tenants in, and work with the police department to clear out any criminal activity.  Two years later, the street is clean, safe and I've realized $691,640 in sales profits and $617,000 in equity I retained with the buildings I decided to keep. Below are the numbers.

Numbers:

1.

Property Type: SFH
Purchase Price: $24,000

Rehab Costs: $33,300

Sale Price: $155,000

Seller Credit: $0

Realtor Fees: $7,500

Net Profit: $90,200

2.

Property Type: Duplex
Purchase Price: $24,000

Rehab Costs: $$51,300

Sale Price: $175,000

Seller Credit: $2,000

Realtor Fees: $8,750

Net Profit: $88,950

3.

Property Type: Duplex
Purchase Price: $24,000

Rehab Costs: $41,000

Sale Price: $175,000

Seller Credit: $2,000

Realtor Fees: $8,750

Net Profit: $99,250

4.

Property Type: SFH
Purchase Price: $27,500

Rehab Costs: $33,000

Sale Price: $155,000

Seller Credit: $2,000

Realtor Fees: $7,750

Net Profit: $84,750

5.

Property Type: Duplex
Purchase Price: $24,000

Rehab Costs: $41,000

Sale Price: $179,200

Seller Credit: $0

Realtor Fees: $8,960

Net Profit: $105,240

6.

Property Type: Duplex
Purchase Price: $24,000

Rehab Costs: $43,000

Sale Price: $200,000

Seller Credit: $17,500

Realtor Fees: $10,000

Net Profit: $105,500

7.

Property Type: Duplex
Purchase Price: $24,000

Rehab Costs: $38,000

Sale Price: $190,000

Seller Credit: $750

Realtor Fees: $9,500

Net Profit: $117,750

I decided to keep the remaining 7 doors from this portfolio as cash-flowing rentals.  The 7 doors are collectively valued at $720,000 and only have $103,000 worth of debt on them (which means I have $617,000 worth of equity in the properties).

TOTAL SALES NET PROFIT: $691,640

TOTAL EQUITY IN REMAINING PROPERTIES: $617,000

TOTAL PROFITS + EQUITY: 1,308,640

Happy to take any questions.

Any updates on a list for North Carolina? Looking for a HELOC/Line of Credit on three paid off properties.