All Forum Posts by: Brett Nigro

I'm selling my 2 family in Cambridge MA (https://www.zillow.com/homedet...) and using a 1031 to upsize my # of doors in my portfolio into New Hampshire.  This is the first time I'm doing a 1031X and I have several misconceptions and learned some cool things so I imagine other here would appreciate the following summary.   

1.    I thought it was only the GAINS that went into the calculations for the 1031.  Not so, it is the actual selling price less closing costs.

2.    I thought you have 6 months to buy new property(s).  While true, you need to submit a list of properties within 45 days of closing and cant change them AND close on some or all of them within 180 days AND use all the cash proceeds.

3.   You can also do a partial 1031? You can for example put some of the process of the sale into the 1031 and the rest is called the "Boot".  You pay the tax on the boot in that tax year of the sale.

4.  If your 1031 fails, all the gains become a taxable event.  Should the 1031's 180 days carry you into the next tax year, you defer the tax into the following year.

So....my budget for new properties just increase by 33% and I need to start identifying properties now so I'm ready for when I close in MA.  I will be exploring some create offer writing as well to provide some buffer and protections.  I will share them once fully formulated.  Like with anything else, do your homework in ADVANCE of NEED.

Tried to edit my title type-o but BP doesn't seem to allow that....

My personal experience is to avoid working with friends and family in most business circumstances, real estate or otherwise.  It can be challenging to put that wall up between the business aspects of the relationship and the personal.  It's fine in the beginning, then things always get complicated.

Your situation is a sticky one, and one many if not most of us face.  We all know a realtor on a personal level right?  The bottom line is this is a business first.  One of my favorite books is "Think and Grow Rich".  My biggest takeaway from it is the Mastermind Theory.  Surround yourself with the absolute best subject matter experts you can find while you captain the ship.  

If you are in an absolute bind relationship wise, you can consider the referral route. Have your friend or family realtor refer you to an REI Agent. This way you get to work with a subject matter expert while your friend/family member gets a referral fee. It's not ideal and I'd avoid it if you can, but it's better than self sacrificing on YOUR own investment business riding around with cousin Suzy looking at bad deals she thinks are great because she doesn't know the business.

Hey Lior,

Thanks for the note.  I lived in Newtonville right out Bentley on Watertown St.  I started my first business out of that dinning room!  Good memories. 

Happy to connect.

Thank Lien.  I'm somewhat open to location at this point.  As you know, buying in the Boston/Cambridge market is an expensive proposition.  I plan to look in the southern NH markets in towns like Salem, Derry, Nashua and Manchester in addition to Boston north.  I need to do a lot more homework to understand if that's even a good area to target.

Yes, on the short term.  I was thinking short term corporate housing/faculty housing as you mention @30 days+.  Most of the renters have been MIT and Harvard grad students. 

Hi All,

First, Thank you for viewing my post, here a little background:  I recently completed a long overdue refinance of my existing rental property. It's a 2 family free standing house in Cambridge, MA with 4 car off street parking, walking distance to MIT, Harvard and Google's new offices.  Purchased in 2006 and we lived there for 5 great years then moved to the burbs to start a family. 

OK...on to business:  The property has appreciated 3x since purchase.  I just did a cash out refi and still have over 60% equity in the house.  Took the cash out and paid off the mortgage on my primary home.  The rents from Cambridge still cash-flow at nearly the same level as pre-refi thanks to better rate/product with long term tenants at under market rents.  I may try short-term in one of the units when one turns over, not sure yet.  I love the folks I have in there now.

This process really RE-opened my eyes to the value of rental property investing.  I knew it already...but now I want to scale the portfolio.  I'm ready to allocate substantial time and dollars to invest in the acquisition of many more properties.  I would like to acquire a large portfolio that my kids can take over managing when they enter the workforce.  I'm concerned about what their traditional career options will look like then.

I could have used the cash-out to Brrrrr but I have other funds for that. It's comforting holding the deed to my family home (I can always HELOC down the road). Now I need a solid plan and to fortify my network of subs, advisors, lenders, etc. I'm hoping BP will be a decent resource for both strategy and resources.

Thanks again for viewing,

Brett