All Forum Posts by: Cary P.

@Larry Fried, we are learning that DST fees make this an unreasonable route. Not heading down that path any more, I don't think. I'm talking to Inland on Friday to get some questions answered, but if my understanding is correct, they are just too fee heavy that I cannot see making any growth from them.

@Trey Read, you cannot avoid paying property taxes.  When you close, the taxes will be taken out regardless.  In Colorado, we pay property taxes in arrears, so if I sold any time before June of 2018, I'd be responsible for 2017 taxes and the portion of the 2018 year where I owned the house.  If you are living in the house, it isn't available for the 1031 exchange, but as stated above, living in it for 2 years means you don't pay any cap gains taxes for gains under $250K as a single filer.  If you are claiming part of it as a rental, that mucks up the works a bit on your taxes, but you'd have to talk to a CPA about how because I've never been in that situation.  Good luck!

@Larry Fried, have you looked into DSTs with your syndication paragraph on your blog?  We are considering DSTs for our 1031 exchange and I'm wondering if you have any experies with DSTs.  We are on the fence based on what we are reading, but we are looking for uber-passive and this strategy fits into a 1031 exchange with the tax advantages intact.  Thoughts?

TL;DR: I need key words to punch into Google..

We want out of real estate. I'm sick of dealing with ******** tenants - I am not the police, I am not your mom, learn how to get along.  

I do not want to 1031 into a passive property investment where I need to trust some other company to have my best interests at heart (Inland, AEI, etc).  I don't trust middlemen. I just want to get out of real estate because my personality is not suited for public relations.

We have a multi-unit complex.  It has appreciated nicely since we've owned it and now we want to get out of the active management of tenants into something not property related.  I am capable of finding investments for the proceeds, but I'm looking for vehicles to avoid paying 40% to the IRS.  So far, the CRUT seems the most likely, but I'm probably too young.

I want concrete ideas of things I can research myself to see what would work for me and my husband so I can go talk to my CFA, my CPA, or my tax attorney without glazed over eyes.  I know a CRUT, CRAT or GRAT will work when we are older, but I'm still in my 40s.  Are there other vehicles or are these kind of the big 3?

I'm not asking you to consider what I want to do down the line, I'm smart enough to figure that out if I know what I'm looking for. I'm trying to figure out what those vehicles are and I'll do my own research into if it is a good fit.  Once I narrow down things, I can direct my CPA or CFA knowledgeably and we can come up with a plan that will make sense to both of us. I'm proactive and don't like to be told "this is the only way" because my CPA or CFA doesn't understand or know of all of the possibilities.  I want to know what those possibilities are so I can do my own research.

Does that make sense or make me sound like a *****?

Hey Folks,

My husband and I are planning ahead in this crazy real estate market.  Do you guys have future strategies that you are looking into to get out of real estate?  I'm not talking 1031 into some other property, but true exit strategies for estates, etc.  I know there are Delaware Statutory Trusts and Charitable Remainder Trusts, but are there other vehicles for selling your properties that we should be researching?

Thanks,
Cary

We are in a similar situation in Allegheny County.  With the Quit Claim deed in Colorado, I can say it is a $10 or less "sale" and not pay anything.  The reason we have to do it is because we are under contract by our Living Trust.  We aren't sure what we were going to do - a new EIN, a subsidiary of a company we already have, roll into a company we already have or just keep it in our Living Trust.  A lot of legal to consider while doing this.  For @Brent Roberts, how many people will be in the company? I'll be a company of 1 if I go the LLC route.

Great! Thank you very much! I will reach out to him.  

At this level, it almost seems like free money for having money, so I need someone to take off the rose colored glasses and show me the down sides.  We have a verbal offer we almost can't refuse, so we'd need to 1031 exchange and we are hoping for something more passive than the multi-unit apartments we have right now.

Hey Folks,

I'm not looking for business partners (ever) or properties yet, but I am hoping to find a few mentors that are familiar with Triple Net properties. We have an opportunity to 1031 and we are trying to weigh the pros and cons, so I'd love to speak with a few folks who have moved from multi-unit residential to triple net or who are only triple net so we aren't going into this as blind as we did from our move from SFH to multi-unit.

Thanks!
Cary

The biggest recommendation I can have is decide how much time you are planning on putting into the property.  I never imagined I would be quitting my job to run this thing full time shortly after buying it.  That was the most unexpected part.  You should also work on getting a local team that you can talk to about whatever properties you are looking to buy.  Even if you aren't using a property management company, maybe talk to them about pitfalls, concerns, etc.  Find a financier that will mentor you on the downfalls there - recourse versus non-recourse loans, arms, balloons, etc.  Find a real estate agent with experience in multi-unit.  Even though we are coming out of this hole we've dug, there are many things a more experience agent might have been able to notice or warn us against.  Make sure you have a good team - that will make all the difference in the world regardless of how many units are in the building.

I just found "You Need a Budget" to budget our monthly expenses.  A lot of people use it as a purchase tracking tool and move money around from one category to another when they have spent too much.  I think that is the wrong philosophy.  I say "I have this much for groceries" and I am finding ways to stay at or below that amount.  My budget is only about 60% of the monthly take home - that other 40% goes into savings.  We drive 10 year old cars, we wear non-brand clothing, we keep the heat at 65/62 in Denver during the winter months (September through June :) ) and at 75 during the summer. We have a budget for $100 for eating out - we only eat out fancy once a month (Ted's type fancy, not Ruth Chris) and we don't binge on TV or movies, etc.

As far as the rentals go, we have bought well by buying properties that are on transportation lines in up and coming areas that are in the process of revitalizing.  And it doesn't hurt that we are in the Denver Metro area with some meteoric raises in property value and rents.  A house we bought in May 2012 for $205 is now worth about $375 with no changes and rent jumped from $1300 to $2000/month while our fixed rate mortgage didn't budge.