All Forum Posts by: Steve Smithy

Do I need to use a commercial mortgage/note to buy a replacement property on a 1031 exchange?

I sold a property, used a 1031 qualified intermediary to hold the funds, and now I want to buy the replacement property. I currently have no mortgages, and was thinking it would be nice to use a conventional mortgage to buy the property as they are typically lower interest. I have no problem putting the property or mortgage in my name instead of a LLC or corporation, is there a way to use a regular 30yr conventional mortgage when I buy the replacement? The 1031 rules don't say anything about the mortgage being commercial, only that it be like-kind and greater than the one it replaces, and that all the cash must go into the replacement property.

Wow there is a lot of back and forth on this.  The answer is simple.  CHANGE PROPERTY MANAGER ASAP!  You won't get your money back, you could go fight them but you will waste time/effort/brainpower on something that won't be worth it.  Take your business elsewhere, there is no debate here.  It clearly wasn't your fault and the PM sounds crappy.  You are technically correct,  but you'll spend far more than you will ever get back.  Post a review about the PM to at least warn others.

Hi Matt,

The midwest, Indiana, Pennsylvania, etc.

Hi Chris,

I am also from Boston, and I decided to invest out of state since the returns are better. I was able to find deals with a much better ROI out of state, contact me if you'd like to know more or meet for a lunch or something.

Glen: The one in PA is a suburb north of Pittsburgh.

Mike: The problem is the time, it isn't worth my time right now to go out there just to yell at the property managers, hence why I think I should sell. If I spent that time instead focusing on my primary business I would make more!

The worst performing one is just under 2% now I believe.

To answer your question, I get financing lined up BEFORE making an offer on a place, this way I can act quickly when I find a good deal.

Never rent to family, you'll end up having to harass them for rent, and it causes more stress. If you want an investment, buy an investment, otherwise you might as well just pay their rent for them!

I didn't mean they only pay 1%, they pay more like 3-4%. One building was 50% ROI the first year!

Yes I would buy them, if I was looking to buy properties. I would buy and change property management! But I like the REIT idea, I may go that way.

@Mike D'Arrigo - I find it funny that you say multifamily is somehow not as good as SFH, I prefer the opposite! 1 roof, 1 structure, multiple tenants offsetting repairs, vacancy is easier to handle, cheaper cost per unit, etc. I'm debating selling some 4plexes near Indy myself right now.