All Forum Posts by: Brandon Giarusso

Ok yes I misspoke, only one member of my sub member LLC signed on the deed. This is what I was afraid of. This might change the plan of accepting the deal then, it would be a significant tax hit. Thats a great idea to run by the partners and our accountant. There seems to be tax loopholes in everything real estate, so I was hoping for creative ideas like that. Thank you

Thank you for the reply. Im probably going to butcher this because Im more of a silent investor on this and am not on the note or privy to the financials. Also clearly not a 1031 expert. 

A group of us bought a building with TIC under one LLC. That LLC on paper is the owner of the property. I have a sub member LLC that owns 32% of that. The controlling member with the biggest % is offering to buy everyone else out at a valuation that essentially doubles our money, plus all the rent accrued. We all agreed. But our sub member LLC would like to 1031 into another deal. We just didn't know if that was possible since the LLC that bought the building, will still continue to own it. We are just being bought out. I prob made that more confusing, and to someone who understands 1031's this might be a silly question. But every time Ive done a 1031 it was always on the sale of a whole property and those members were involved in the next 1031.

Thank you Dave!

Im invested in an industrial building. My LLC owns 33% of the building. We have been offered a proposal to be bought out. Can we take our profit from the buyout and 1031 exchange it into another property? Or is this not possible since the entire entity that bought it isn't selling as a whole? And if not, is there a way to structure the buyout so that is possible?

Thanks!

Im looking at possibly purchasing a couple small senior living houses in the Phoenix area. On paper the returns look incredible, however I am totally new to this category so Im not sure totally how to analyze it. I do not want to run the day to day operations. They said a manager can be provided. I assume there are 3rd party companies for this, wondering if anyone on here had any experience in this field or had any recommendations of someone to talk to in the Phoenix area. Thanks in advance!

Thank you all for the replies. I have met with many brokers. All of which were recommended by people I know. I try to be as clear as i can about what I want and budget, and the returns I’m looking for. And they aren’t unrealistic. What seems to happen is they send me a lot of stuff right away, and it’s usually things that their brokerage represents first. I have put myself in their shoes and I get where they are coming from. We are all out here trying to make money.

Anyone find it hard to find a good commercial agent? I  recently have decided to switch my business from flipping and small holds, and attempt to buy bigger multifamily and commercial. However I    am finding it very hard to find an agent to take me seriously. I    have a good amount of cash and have access to quite a bit more, yet that isn't enough, even with proof of funds. It seems that most commercial agents are investors themselves first, or they have much bigger whales to feed. So all the good deals either they will buy, or send to their bigger clients. Any deal that gets tossed my way has already been turned down several times and isn't worth my time. I    am trying to network as much as I    can, but I    am finding this to be much more challenging than I     expected. Any advice for a new commercial investor to find some deals?

@Matthew Paul the sellers had no problem telling me about the renovations they did because on the outside they looked great. The design was great, and I easily found the listing from when they purchased it.

My contractor looked up the permits on the house with a simple internet search. It shows everything, including the complaints as well as when the truth and housing was done. Which I found out was 4 days AFTER the PA was signed. I ended up running into their agent at another property about a year later and she tried to duck me. I caught up to her and confronted her and she played dumb at first. But when I showed her all the info she caved pretty quickly. Begged for me not to get her any trouble for the late truth and housing and swore she didn't know about the house problems. I didn't feel like ruining her career because of some bad clients. 

Its def a lesson learned, I was a newbie then and would never buy the duplex again. Luckily the duplex market is crazy in Minneapolis right now so I should be able to at least break even. 

Yes, you are supposed to disclose any information like, pipes freezing, that kind of thing when you sell the property. The problem lies in proving intent. I know they lived there for one of the coldest winters in MN, so I know they knew the pipes froze, but being able to prove that is a tough thing from a legal stand point. I talked to an inspector about this and he basically told me to stop talking, because if he hears about all this non-permitted work being done he would have to come rectify it. Saying I would have to pay the fines, and he could just rip my deck off because it was built without permit. I just think that is awful that someone could get away with this. And now that I want to sell I want to know how much responsibility I will bear for all of their misdoings. 

Thanks for your response. 

I purchased a duplex that I have lived in for a couple of years. It passed all inspections when I bought it, however I quickly realized there were many problems hidden behind the walls. I did some digging and found out the the previous owners had renovated the entire place, without pulling a single permit or having a single inspection done. I will try and keep it concise on what was wrong just to give an idea; the first winter all my pipes froze. When I opened the wall up I found that the insulation was on the wrong side of the pipes, trapping the pipes against the cold outside wall. When i did that I saw that the dryer vent was smashed into the wall, almost flat to fit. It was full of lint, not a matter of if, but when that would have started a fire. That was just the tip of the iceberg, I've had electrical, plumbing, and many more problems with the house. Needless to say it wouldn't have passed insulation, framing, electrical, or plumbing inspections had they been done. Not to mention there were walls removed without an engineer signing off. Not only was it illegal, but its dangerous to me and my renters. My question is do I have any legal ground to stand on to go after the previous owners? I am about to sell this property, and I have spent a lot of money and time fixing what I have found and can, but do I have to disclose this even though I didn't renovate it?

Lesson learned in all of this is if you buy a renovated property, to double check the permits pulled on the property.