All Forum Posts by: Charles Chang

I am currently executing a 1031 exchange and have about 28 days left to identify three properties. I have been looking at the ABQ market and noticed that the cap rate is pretty good compared to other markets. Can anyone recommend an agent that specializes in Multi-family buildings in the ABQ area?

Thanks in advance!

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@Joel Owens...Thanks for sharing your wisdom with me. It sounds to me like you are aware of the potential pitfalls for NNN leases. I definitely will be in contact with you shortly!

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@Kevin Sobilo AirBnB invloves too much time and interaction for me and living in a multifamily unit is out of the question as I don't think the wife and kids would like that too much. Now if I were single, I certainly would consider strategies such as house hacking. But in the San Gabriel Valley area, that might be tough as duplexes for sale in areas with quality school district often go over 1 million dollars.

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Originally posted by @Joe Villeneuve:

You're missing one huge thing. Since this is hands off, you don't need to restrict your location to anything remotely close to you. I myself intend to by the first NNN property on the Moon, but would accept Mars as an alternative location.

I agree. I have been looking on crexi for opportunities all over the US.

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How much $$ are we talking here? It's not easy to get significant cash flow in SoCal. Based on my general observation, the cash flow gets better as you get away from the coast.

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I have been thinking of doing a 1031 on my SFR rental properties in SoCal with a 3.2 cap rate. After looking at Multifamily units, I discovered commercial buildings with NNN leases that can be as long as 20 years with around 5 percent cap rate. It almost sounds too good to be true. Hands off management and just wait for the rent check? That would be ideal.

Now I understand location and rent to revenue ratio is important. I would also like to get a lease backed by a national corporation like Bank of America or Burger King.

Assuming I can find a deal that has meet all the criteria, am I missing anything else?

Please excuse me for my ignorance as I have never dealt with commercial properties before but I am very intrigued by the apparent ease of NNN deals.

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Originally posted by @Nabil Suleiman:

@Charles Chang

I still know lots of people that continue to invest in CA too. It really depends on you and what you want/ feel comfortable with.

For me to invest in California, it's gotta be a lot better than the 3.2 cap rate I am getting on my current properties right now. Otherwise, it wouldn't be worth the trouble to do a 1031. My minimum expectation is a 5 cap rate.

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Originally posted by @Steve Babiak:

Originally posted by @Charles Chang:

@Nabil Suleiman

Having never been to Pennsylvania and Ohio... What are the advantages of investing in those places?

In the world of the 1031 exchange, there is a saying of "swap til you drop" - meaning that a property acquired in a 1031 exchange should only be sold as part of another exchange for the remainder of your life so that the capital gains due never occurs. Now as @Dave Foster will concur, Pennsylvania is the only state out of the 50 that will not allow the capital gains due to the state to be deferred; that means when you sell a Pennsylvania property, even as part of a 1031 exchange, there will be capital gains tax due to the PA Department of Revenue.

So that is a drawback if you get a property in PA as part of a 1031.

Well, that definitely takes Pennsylvania out of running.

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Originally posted by @Robert Adams:

Cap rates are still pretty decent in vegas and rents are increasing. Appreciation rates are better than most areas of the country as well for 2018.

I would go after condos in vegas because financing is limited currently but expected to loosen by year end which will increase buyer pool and values.

I see HOA fees as money down the drain. I would rather do SFR over condos.

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@Nabil Suleiman Having never been to Pennsylvania and Ohio... What are the advantages of investing in those places?

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All Forum Posts by: Charles Chang

Charles Chang has started 4 posts and replied 23 times.

Post: Looking for Multi-family Agent Recommendation

Post: How to evaluate an NNN lease deal?

Post: Inherited funds, what to do

Post: How to evaluate an NNN lease deal?

Post: Inherited funds, what to do

Post: How to evaluate an NNN lease deal?

Post: Thinking of Doing a 1031 on two SFRs to Multi-Family

Post: Thinking of Doing a 1031 on two SFRs to Multi-Family

Post: Thinking of Doing a 1031 on two SFRs to Multi-Family

Post: Thinking of Doing a 1031 on two SFRs to Multi-Family