All Forum Posts by: Charles Moore

Bob, let me provide some background info - most importantly, I bought this condo as my first personal residence at the beginning of 2009 with 10% down and a fixed 30-yr mortgage. A growing family prompted me to upgrade to a nearby house, which we did in 2013. Thanks to reading material on BP, I'm renting out the condo from 2013 - 2016 to some ideal long-term tenants, and make about $100 in positive cashflow every month (my primary purpose was just to have them cover the condo mortgage + insurance + property taxes + HOA dues + maintenance costs until the condo appreciated enough with the recovering market to sell for a profit). The condo has appreciated quite a bit now and is predicted to keep doing so throughout the next year. When I sell next year, I may have a $75K net profit after closing costs, improvements, realtor fees, etc. I want to do a 1031 exchange with that. I could use that as a down payment on typical $375K SFH here in the Seattle area and manage it myself again, and at most I might get $300-$400 positive net cash flow every month. However, I'm busy with career and family and can probably count on more maintenance involvement with this new property, and a PM would of course decrease the net cash flow. I'm thinking of doing what other BP investors in expensive areas have done: put my money in less expensive markets where it can go further. Specifically Memphis invest with Chris Clothier. I figure I can get multiple properties with the $75K divided up into the down payments for each of them, and cash flow of closer to $1000/month from all combined. Plus their well regarded PM.

As for rose-colored glasses, this is just one option I am researching now, part of which is talking with other BP members. I've read some bad turn key stories as well as good, so remaining objective is my main criteria.

I wouldn't go so far as to call this condo a golden goose. One of the problems is that the HOA only allows so many non-owner occupied units there, and that allowance is always maxed out. If and when my tenants leave, I would go to the bottom of the waiting list to rent it out again and thereby be sitting on a cash drain with the mortgage and HOA dues, and I would not even consider moving out of my primary residence to live there due to the space my family needs. Besides, my rate of return for cash flow on this is very low, and I hate dealing with the HOA and their incompetent property management.

 Hi, Dave! In doing a section 121, would depreciation I took on the rental be recaptured? Might be a moot point, though, because according to the calendar days between my move out and my projected sale date, I think I will not make the 2-year minimum requirements, so 1031 is probably the next best option using the 200% rule.

I've also heard on the rich dad series that most qualified intermediaries are not regulated and pool all their clients' funds together for their own investing purposes, rather than having individual accounts for each client, and this presents the possibility of their losing some of the investor's funds that were earmarked for the 1031. Know anything about this?

Thanks!

 Yes, I've read about that, too. I would search for 4-5 properties that fall under the 200% rule. Thanks for the quick reply!

 Thanks for the quick reply! Yeah, I did inadvertently make a duplicate post. My first one resulted in a website technical error message which made me think it did not post.

I've read good things about Indianapolis, Kansas City, and Cleveland. Already checked out Texas, Birmingham, and Atlanta; found some things about each that don't match my search criteria.

Hi, BP!

Just joined up after being a long-time reader because I finally need to ask: when doing a 1031 exchange, is it realistic to identify and secure 4-5 properties in the 45-day identification period (and abiding by all the other 1031 rules)? I'm thinking of doing this through Memphis Invest properties with Chris Clothier. The numbers indicate I can get better net cash flow and rate of return in that part of the country than in Seattle.

Hi, BP!

I just joined after having read numerous articles and forums on here for some time now, and now I am planning my next move. 

Here's my situation: bought my first property - a condo - in the north Seattle area as my personal residence at the beginning of 2009. A growing family prompted me to upgrade to a nearby house, which we did in 2013. Thanks to reading material on BP, I'm renting out the condo from 2013 - 2016 to some ideal long-term tenants, and make about $100 in positive cashflow every month (my primary purpose was just to have them cover the condo mortgage + insurance + property taxes + HOA dues + maintenance costs until the condo appreciated enough with the recovering market to sell for a profit). The condo has appreciated quite a bit now and is predicted to keep doing so throughout the next year. When I sell next year, I may have a $75K net profit after closing costs, improvements, realtor fees, etc. I want to do a 1031 exchange with that. I could use that as a down payment on typical $375K SFH here in the Seattle area and manage it myself again, and at most I might get $300-$400 positive net cash flow every month. However, I'm busy with career and family and can probably count on more maintenance involvement with this new property, and a PM would of course decrease the net cash flow. I'm thinking of doing what other BP investors in expensive areas have done: put my money in less expensive markets where it can go further. Specifically Memphis invest with Chris Clothier. I figure I can get multiple properties with the $75K divided up into the down payments for each of them, and cash flow of closer to $1000/month from all combined. Plus their well regarded PM.

So after researching Memphis Invest and reading up on 1031 exchange rules, my initial question is whether it is realistic to identify and secure 4 or 5 properties with the 45-day identification period allowed by the IRS?